Water: Economics
Policy & Guidance: Worksheet I
Interim Economic Guidance for Water Quality Standards
Calculation of Profit Rates
With and Without Pollution Control Project Costs
A. Profit Rate Without Project Costs
PRT = EBT ÷ R
Where:  PRT  =  Profit Rate Before Taxes 
EBT  =  Earnings Before Taxes  
R  =  Reveneus 
Three Most Recently Completed Fiscal Years
19___  19 ___  19 ___  
EBT [Worksheet H, (4)]  ________  ________  ________  (1)  
R [Worksheet H, (1)]  ________  ________  ________  (2)  
PRT = Calculate: [(1)/(2)]  ________  ________  ________  (3)  
Considerations: How have profit rates changed over the three years? 

Is the most recent year typical of the three years? Yes No (If not, you might want to use an earlier year or years for the analysis)
How do these profit rates compare with the profit rates for this line of business"? Please discuss below. 
B. Profit Rate With Pollution Control Costs
PRPR = EWPR ÷ R
Where:  PRPR  = 
Profit Rate With Pollution Control Costs 
EWPR  =  BeforeTax Earnings With Pollution Control Costs  
R  = 
Reveneus 
The Most Recently Completed Fiscal Year 

19___ 

EWPR [Worksheet H, (7)]  $________ (4) 
R [Worksheet H, (1)]  $________ (5) 
PRPR [Calculate: (4)/(5)]  ________ (6) 
Considerations:
What is the percentage change in the profit rate due to pollution control costs ? Calculate as follows: (PRPR  PR)/PR x 100
How does the profit rate with pollution control compare to the profit rate of this line of business?