Earnings before tax (EBT) is the amount of profit remaining from total revenue after interest expenses have been deducted but before income taxes are deducted.
For example, a company reports EBIT of $500,000 and pays $60,000 in annual interest on its loans, resulting in EBT of $440,000. The company's accountant then calculates the income tax owing based on this pre-tax earnings figure.
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