Earnings Before Tax Template
This earnings before tax template shows you how to calculate the earnings before tax using line items in the income statement.
Below is a screenshot of the EBT template:
![Earnings Before Tax Template]()
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Earnings before tax (EBT), or pre-tax income, is the last subtotal found in the income statement Income StatementThe Income Statement is one of a company's core financial statements that shows their profit and loss over a period of time. The profit orbefore the penultimate net incomeNet IncomeNet Income is a key line item, not only in the income statement, but in all three core financial statements. While it is arrived at through line item. Earnings before tax is found after all deductions have been made against sales revenueSales RevenueSales revenue is the income received by a company from its sales of goods or the provision of services. In accounting, the terms sales and. These deductions include COGS, SG&ASG&ASG&A includes all non-production expenses incurred by a company in any given period. It includes expenses such as rent, advertising, marketing, depreciationDepreciation ExpenseWhen a long-term asset is purchased, it should be capitalized instead of being expensed in the accounting period it is purchased in. and amortization, and interest expense.Interest ExpenseInterest expense arises out of a company that finances through debt or capital leases. Interest is found in the income statement, but can also
Earnings Before Tax Formula
There are three formulas that can be used to calculate Earnings Before Tax (EBT):
- EBT = Sales Revenue – COGS – SG&A – Depreciation and Amortization
- EBT = EBIT – Interest Expense
- EBT = Net Income + Taxes
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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