Pre-tax Earnings

A company’s pre-tax income refers to its net profits before deduction of corporation tax i.e. its revenues less all other expenses, including interest, depreciation and amortisation. Or put another way, pre-tax income is a company’s net income plus corporation tax paid. Analysts and investors like to look at income on a pre-tax basis as companies have a variety of tax arrangements and don’t all pay the same tax rate so looking at the numbers pre-tax gives a better gauge of comparability.