Enter the total revenue and total operating costs into the calculator to determine the earnings before tax (EBT).
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EBT Formula
The following formula is used to calculate the earnings before tax:
EBT = R – OC
- Where EBT is the earnigns before tax
- R is the total revenue generated ($)
- OC is total cost of operations ($)
EBT Definition
What is EBT?
EBT, short for earnings before tax (also commonly referred to as EBIT or earnings before interest and tax), is a term used in business to describe the total amount of profit made from a business before taxes are taken.
Example Problem
How to calculate EBT?
- First, determine the total revenue earned for the business.
For this example, the total revenue is given as $50,000.00.
- Next, determine the total costs during the same time period.
This is typically all operational and direct costs associated with the business. In this case, the costs were $30,000.00.
- Finally, calculate the EBT using the formula.
Using the formula above, the EBT is calculated to be:
EBT = R – OC
EBT = $50,000 – $30,000
EBT = $20,000
