Definition
Earnings before tax (EBT)
Earnings before tax (EBT) is the amount of profit remaining from total revenue after interest expenses have been deducted but before income taxes are deducted.
Earnings before tax (EBT) measures a company’s profitability before income taxes are factored. It is the amount of money left after all expenses are subtracted from revenues.
Because companies pay tax at different rates depending on where they are located, EBT is a truer reflection of profitability than earnings after tax (EAT).
EBT is often expressed as a percentage of revenues, which indicates how much of each dollar taken in is converted to profit before taxes.
More about earnings before tax
The income statement below shows the earnings before tax for a wholesale company with revenues of $100,000.
