This glossary uses Visual Finance™ to bring financial terms to life. Each example shows data from the Round Number Company, a fictional business with simplified figures to make learning easier. For more details, visit 'How to Read Visual Finance'.
Calculation: Sales less all expenses except Inventory Turns (and Adjustments).
Example: The Round Number CompanySales = 200; COS = 80; OpEx = 72; Finance = 8 EBT = 200 - 80 - 72 - 8 = 40 |
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.
Also called Income Before Taxes.
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Calculator for Earnings Before Tax For a DIY Income Statement Calculator, go here. |
The above is our generic explanations of common corporate financial terminology. Actual meanings can vary widely from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"
term list.