Financial StatementsBeginner

PBT

Profit Before Tax

Profit after all expenses and interest, but before income tax.

Detailed explanation

PBT sits just above the tax line. Comparing PBT across years removes the effect of changing tax rates.

Formula

PBT = EBIT − Interest (+ Other income − Exceptional items)

Example

EBIT ₹80 cr − interest ₹10 cr = PBT ₹70 cr.

Why it matters

Useful when tax rates or one-time tax credits distort PAT.

Key points

  • Effective tax rate = Tax ÷ PBT.
  • Sits between EBIT and PAT.
  • Watch exceptional items.

Related terms

PATEBIT

More in Financial Statements

Income StatementRevenueCost of Goods SoldGross MarginEBITDAEBIT

Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.