Pretax Earnings

外汇网2021-06-19 14:32:10 207

A company's earnings after all operating expenses, including interest and depciation, have been deducted from total sales or revenues, but before income taxes have been subtracted. Because ptax earnings exclude taxes, this measure enables the intrinsic profitability of companies to be compared across locations where corporate taxes differ.

Also known as "ptax income" or "earnings before tax".

For example, a manufacturer with revenues of $100 million in a fiscal year may have $90 million in total operating expenses (including depciation and interest expenses), excluding taxes. In this case, ptax earnings amount to $10 million. The after-tax earnings figure, or net income, is computed by deducting income taxes from ptax earnings of $10 million.

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