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Top Financial Analysis Ratios has over 60 ratios divided into five sections:

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  • Short-term Solvency
  • Efficiency and Turnover Ratios
  • Shareholders’ Investment Ratios

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Quick Definition

Measures how well a company can keep its tax expenses under control.

Tax Rate Percentage Formula

Explanation of Tax Rate Percentage

The Tax Rate Percentage is an estimation of the Tax Rate imposed on the company. A measurement of the Tax Rate Percentage over time can be used to determine how well the company is able to contain its tax expenses.

Importance of Tax Rate Percentage

A decreasing Tax Rate Percentage is generally a positive sign, but you will need to investigate why this is occurring. Some possible reasons could be the company has moved some of its operations to an area with a different Tax Rate, or the company is able to record a different value for the Tax Rate than the income tax it actually had to pay.

The Tax Rate imposed on a company does not usually change much, and any change needs to be researched further as this can be an indicator of large changes occurring within a company.