Average tax rate
Average tax rate is a rate that is calculated by taking the total amount of tax paid divided by taxable income.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Average tax rate. Calculated by taking the total amount of tax paid divided by taxable income.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Average tax rate. Taxes paid divided by taxable income.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
