To find the effective tax rate, we first need to determine the total taxes paid by the company. The effective tax rate can be calculated using the formula:
\[ \text{Effective Tax Rate} = \frac{\text{Taxes Paid}}{\text{Earnings Before Taxes}} \]
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Calculate Taxes Paid:
We know the earnings before taxes (EBT) and the net income. The relationship can be expressed as:
\[ \text{Net Income} = \text{Earnings Before Taxes} - \text{Taxes Paid} \]
Rearranging this gives us:
\[ \text{Taxes Paid} = \text{Earnings Before Taxes} - \text{Net Income} \]
Plugging in the values from the problem:
\[ \text{Taxes Paid} = 768,680 - 568,306 = 200,374 \]
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Calculate Effective Tax Rate:
Now that we have the taxes paid, we can compute the effective tax rate:
\[ \text{Effective Tax Rate} = \frac{200,374}{768,680} \]
Calculating this gives:
\[ \text{Effective Tax Rate} \approx 0.2603 \text{ or } 26.03% \]
Therefore, the effective tax rate for the company in 2023 was approximately 26.03%.