earnings before taxes


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Related to earnings before taxes: EBIT

Earnings before taxes (EBT)

A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of income taxes.

Earnings Before Taxes

A measure of a company's ability to produce income on its operations in a given year. It is calculated as the company's revenue less its expenses (such as overhead), but not subtracting its tax liability. EBIT represents cash available to pay off creditors in the event of liquidation, and, as such, it is closely watched, especially when comparing companies in jurisdictions with different tax laws. However, it is not as common a measure as earnings before interest and taxes.

earnings before taxes

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By taking the adjusted total assets (whatever method is used) times the desired rate of return on assets, the desired earnings before taxes is obtained.

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