Profit Before Tax
What it is:
Profit before tax measures a company's operating and non-operating profits before taxes are considered. It is the same as before taxes.
How it works (Example):
Why it Matters:
Profit before tax provides analysts with useful information for evaluating a company’s operating performance without regard to tax implications. By removing the tax factor, profit before tax helps to minimize a variable that may be unique from company to company, in order to focus the analysis on operating profitability as a singular measure of performance. Such analysis is particularly important when comparing similar companies across a single industry.