Pretax Profit Margin Formula

The page shows here the pretax profit margin formula to calculate the pretax profit margin of a company. To calculate the pre-tax profit margin, divide the pretax-profit by the net sales (Revenue) value. It is a financial accounting measure used for determining the operating efficiency of a company. Higher pretax margin indicates the profitability and company's managing skills on keeping the operating costs low. It is also referred to earnings before taxes (EBT).


Margin = Pretax Profit / Net Sales (Revenue)

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Pre-tax profit margin is a measure that indicates the way in which the profitability is headed. This pretax profit margin formula will be a very useful one for the finance department of a company to evaluate its operating efficiency.

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