On platforms like Dividend Data, you can find the Income Tax Expense for various stocks. This is in the stock research tool.
Definition:
Income Tax Expense is the total amount of income tax that a company is legally obligated to pay to government authorities in a given fiscal period. It's based on the taxable income, which is the profit calculated for tax purposes, and varies according to the tax laws and rates applicable in the company's operating jurisdictions.
Components of Income Tax Expense
Current Tax Expense: Taxes due on the current year’s taxable income.
Deferred Tax Expense: Arises due to the timing differences between accounting income and taxable income.
Importance of Income Tax Expense in Financial Analysis
Net Income Determination: It's a key deduction from Income Before Taxes to arrive at the Net Income, reflecting the company's profitability after all obligations.
Effective Tax Rate Analysis: Helps investors understand the tax burden on a company and compare it across different companies and industries.
Understanding Fiscal Policy Impact: Changes in corporate tax rates or tax laws can significantly impact Income Tax Expense and, consequently, a company's net earnings.
Income Tax Expense on the Income Statement
Income Tax Expense appears on the Income Statement and is deducted from Income Before Taxes to calculate the Net Income, providing insights into the actual earnings available to shareholders.