Earnings before taxes
Encyclopedia
Earnings before taxes is the money retained by the firm before deducting the money to be paid for taxes. E.B.T includes the money paid for interest
. Thus, it can be calculated by subtracting the interest from EBIT
(Earnings Before Interest and Taxes).
EBT = EBIT - Interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
. Thus, it can be calculated by subtracting the interest from EBIT
Earnings before interest and taxes
In accounting and finance, earnings before interest and taxes is a measure of a firm's profit that excludes interest and income tax expenses. Operating income is the difference between operating revenues and operating expenses...
(Earnings Before Interest and Taxes).
EBT = EBIT - Interest