Suppose 100units of drug is taken orally

Suppose 100units of drug is taken orally ; only 40% gets absorbed- means drug entering the eanterohepatic system is 40 units

Now the extraction ratio of liver is 0.6 means 60% of the absorbed drug will be eliminated

Which means 40% of the drug absorbed will remain after Hepatic Metabolism

The absorbed drug is 40 units. 40% of 40 units is 16

Means 16 % (of the 100 units drug taken ) will appear in blood circulation ( Bioavailability)