Another topic for the first quarter of the fiscal year ending in March 2013 that should be explained is why the effective tax rate will be so high at over 90%. As seen in the figure, when pretax income of ¥4.0 billion is multiplied by the effective tax rate of 38%, it results in tax expenses of ¥1.5 billion for the first quarter of the fiscal year ending in March 2013. Because amortization of goodwill is taxable, this tax expense of ¥0.9 billion is recorded. Because of this and the previously mentioned temporary adverse effect caused by an increase in inventories, total tax expenses are ¥3.8 billion. Subtracted from pretax income of ¥4.0 billion, this results in net income of ¥0.2 billion.
In this manner, there are variations in effective tax rates on a quarterly basis depending on fluctuations in income level. However, this effect should level out on an annual basis, and accordingly this rate does not affect the initial annual net income forecast of ¥22.0 billion.