The Pretax Profit margin or Profit Before Tax(PBT) margin helps in understanding how much Profit does the company make on each dollar of Sales but before paying any Income Taxes to the government.
Since companies operating in different tax jurisdictions may have different tax treatment on their Profits, understanding Pretax Profit Margin becomes more relevant.
Hence, comparing the companies based on Pretext Profit Margin gives better results than purely on Net Profit Margin etc.
Pretax Profit Margin ratio explores this topic in greater depth using the examples, formulas and real life application.
- Similar to all our templates, this template helps you to calculate the Pretax Profit Margin easily.
- The Income Statement and the Balance Sheet is presented as separate working sheets.
- The calculation sheet is linked to the financials such that it picks the numerator and denominator required for the formula and arrives at the Pretax Profit margin ratio