This earnings before tax template shows you how to calculate the earnings before tax using line items in the income statement.
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Earnings before tax (EBT), or pre-tax income, is the last subtotal found in the income statement before the penultimate net income line item. Earnings before tax is found after all deductions have been made against sales revenue. These deductions include COGS, SG&A, depreciation and amortization, and interest expense.
Earnings Before Tax Formula
There are three formulas that can be used to calculate Earnings Before Tax (EBT):
Earnings Before Tax is used for analyzing the profitability of a company without the impact of its tax regime. This makes companies in different states or countries more comparable, as tax rates may differ significantly across borders. Analysts often prefer to add back taxes so they can have an apples-to-apples comparison of earning power across a wide range of companies.
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Below is a break down of subject weightings in the FMVA® financial analyst program. As you can see there is a heavy focus on financial modeling, finance, Excel, business valuation, budgeting/forecasting, PowerPoint presentations, accounting and business strategy.
A well rounded financial analyst possesses all of the above skills!
Additional Questions & Answers
CFI is the global institution behind the financial modeling and valuation analyst FMVA® Designation. CFI is on a mission to enable anyone to be a great financial analyst and have a great career path. In order to help you advance your career, CFI has compiled many resources to assist you along the path.
In order to become a great financial analyst, here are some more questions and answers for you to discover:
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