EBT removes the effect of taxes, making it useful for comparing companies in different tax jurisdictions. It sits between EBIT and net income on the income statement.
How to use the EBT Calculator — Earnings Before Tax
- Revenue
- Cost of goods sold
- Operating expenses (incl. depreciation)
- Interest expense
- Tax rate
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter revenue, COGS, operating expenses (including depreciation), interest and the tax rate.
Tips
- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.
Common mistakes to avoid
- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.
Inputs explained
| Field | What to enter |
|---|---|
| Revenue | Amount in your currency |
| Cost of goods sold | Amount in your currency |
| Operating expenses (incl. depreciation) | Amount in your currency |
| Interest expense | Amount in your currency |
| Tax rate | In % |
What each result means
- Earnings before tax (EBT) = [Revenue] – [Cost of goods sold] – [Operating expenses (incl. depreciation)] – [Interest expense]
- EBT margin = [Earnings before tax (EBT)]÷[Revenue]×100
- Income tax = max([Earnings before tax (EBT)], 0)×[Tax rate]÷100
- Net income = [Earnings before tax (EBT)] – [Income tax]
Example values
How the main result changes when Revenue changes and everything else stays at the example values above:
| Revenue | Earnings before tax (EBT) |
|---|---|
| 500,000 | -330,000 |
| 750,000 | -80,000 |
| 1,000,000 | 170,000 |
| 1,250,000 | 420,000 |
| 1,500,000 | 670,000 |
| 2,000,000 | 1,170,000 |
Formula
EBT = revenue − COGS − operating expenses − interestor EBT = net income + taxesNet income = EBT × (1 − tax rate)Worked example
Inputs — Revenue: $1,000,000; Cost of goods sold: $550,000; Operating expenses (incl. depreciation): $250,000; Interest expense: $30,000; Tax rate: 21 %.
Results — Earnings before tax (EBT) = $170,000.00; EBT margin = 17 %; Income tax = $35,700.00; Net income = $134,300.00.
Frequently asked questions
What is EBT?
Earnings before tax – profit after interest but before income tax.
How is EBT different from EBIT?
EBIT is before interest as well as tax.
Why use EBT?
To compare profitability without the effect of different tax rates.
What formula does the EBT Calculator — Earnings Before Tax use?
EBT = revenue − COGS − operating expenses − interest.