Earnings Before Tax Template

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:

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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):

1. EBT = Sales Revenue – COGS – SG&A – Depreciation and Amortization
2. EBT = EBIT – Interest Expense
3. 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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