Earnings Before Tax

Calculation: Sales less all expenses except Inventory Turns (and Adjustments). 

Example: The Round Number Company

Sales = 100; COGS = 40; OpEx = 36; Finance = 4

     EBT = 100 - 40 - 36 - 4 = 20

Earnings Before Tax is the amount of Profit available after deducting from Sales the costs associated with the operations of the company (Cost of Sales, SG&A) as well as finance charges, but before paying taxes.

 

Earnings Before Tax

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