Earnings Before Interest After Taxes - EBIAT
Definition of 'Earnings Before Interest After Taxes - EBIAT'A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT measures a company's profitability without taking into account the capital structure, i.e., the ratio of debt to equity. EBIAT takes taxes into account because they are viewed as an ongoing expense that is beyond a company's control, especially if it is profitable. EBIAT is not as commonly used in financial analysis as the EBITDA measure. EBIAT is calculated as: EBIT x (1 - Tax rate). |
|
Investopedia explains 'Earnings Before Interest After Taxes - EBIAT'As an example, consider a company that has the following income statement:EBIT $1,000,000 Interest $100,000 EBT $900,000 Taxes (25%) $225,000 Net Income $675,000 The company's EBIAT in this case would be: $1,000,000 x (1 - 0.25) = $750,000. |
Related Definitions
Articles Of Interest
-
Analyzing Operating Margins
Find out how to put this important component of equity analysis to work for you. -
4 Leverage Ratios Used In Evaluating Energy Firms
These four leverage ratios can help investors understand how oil and gas firms are managing their debt. -
How To Evaluate The Quality Of EPS
Companies can manipulate their numbers, so you need to learn how to determine the accuracy of EPS. -
A Clear Look At EBITDA
This measure has its benefits, but it can also present earnings through rose-colored glasses. -
EBITDA: Challenging The Calculation
This measure has a bad rap, but it's still a valuable tool when used appropriately. -
Pay Attention To The Proxy Statement
Don't overlook this overview of a company's well-being. -
Explaining Amortization In The Balance Sheet
Amortization is important to account for intangible assets. Read to find out more about amortization. -
Top 4 Most Competitive Financial Careers
If your goals include a big paycheck and working for a Wall Street firm, then you need to learn how to meet employers' expectations. -
A Day In The Life Of A Public Accountant
Here's an inside look at the workdays of two experienced CPAs, to give you an idea of what it might be like to pursue a career as a public accountant. -
Earnings Guidance: Can It Accurately Predict The Future?
Explore the controversies surrounding companies commenting on their forward-looking expectations.
Free Annual Reports