Definition:
Change in Income Taxes Payable refers to the difference in the amount of income taxes a company owes at the end of a reporting period compared to the previous period. It reflects how much the company's tax liability has increased or decreased over a specific time frame.
Examples
Formula:
Change in Income Taxes Payable = Income Taxes Payable at End of Period - Income Taxes Payable at Beginning of Period
How to use the metric:
This metric is used to assess changes in a company's tax obligations over time, which can indicate shifts in profitability, changes in tax rates, or adjustments in tax planning strategies. It is often analyzed in conjunction with other financial metrics to understand a company's financial health and tax strategy.
Limitations:
Applies to:
This metric is applicable across various industries, especially those with significant tax obligations, such as manufacturing, retail, and financial services.
Doesn't apply to:
Industries with minimal tax obligations, such as non-profit organizations, may find this metric less relevant. Additionally, industries with complex tax structures, like multinational corporations, may require more detailed tax analysis beyond this metric.
Summary:
Change in Income Taxes Payable is a financial metric that measures the variation in a company's tax liabilities over a specific period. It provides insights into changes in tax obligations but should be used alongside other financial metrics for a comprehensive analysis. While applicable to most industries, its relevance may vary based on the complexity and nature of the business's tax situation.
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Financial data provided by FactSet is standardized for consistency across companies, industries, and countries. Results may differ from original reports due to adjustments based on global accounting standards and methodologies.