What is 'Earnings Before Interest After Taxes  EBIAT'
Earnings before interest after taxes (EBIAT) is a financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to aftertax 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).
BREAKING DOWN '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.

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