Hello guys!
Can someone explain why we add 10m in the top and 20m in the numerator?
Kaplan book 3 page 35
Hi bro,
10M was additional depreciation charged to the P&L. So we need add back 10M to the EBIT.
20M was the interest that was capitalized. So interest expense in the P&L is short of thi amount, so it needs to be added to get to the actual interest expense.