Before tax income is also called pretax income or earnings. This is the income of any entity/company which is left after meeting all operating costs, including depreciation and interest. The latter has to be deducted from the total revenues/sales in order to calculate the before-tax income. This indicates the financial standing of a company and its overall financial performance, prior to the impact of taxation.
Before-tax income is also called as pretax income. This is also called earnings before tax or pretax earnings. This is the net income that is earned by any company or entity prior to the deduction of taxes. This does take into account deductions linked to depreciation, operating expenditure, and interest costs. One has to add all the gains and income, before adding expenditure and losses cumulatively. The negative items should be deducted from the calculation, while obtaining the net income.
EBT or earnings before tax is often the measure of the financial performance of any company. This helps calculate the earnings of a company before deducting taxes and other depreciation heads. This may be applicable for companies engaged in the real estate business or those which are a part of the industry. This could also mean the cash flow produced by a real estate investment after all revenues have come in and payments have been done for servicing debt and meeting operating costs. However, depreciation should also be deducted in this case. This will give the final before-tax income of any real estate property.
