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Earnings before taxes (EBT) |
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Earnings before taxes (EBT)A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and nonoperating profit before the deduction of income taxes.Earnings before taxes (EBT) Similar MatchesRetained earningsRetained earningsAccounting earnings that are retained by the firm for reinvestment in its operations; earnings that are not paid out as dividends. Upper earnings levelUpper earnings levelThe earnings level of an employee above which no further Class 1 National Insurance contributions are payable. Price earnings ratio (P/E ratio)Price earnings ratio (P/E ratio)P/E = current share price of a company divided by its earnings per shareA company with a share price of 100p and earnings per share (EPS) of 5p has a P/E ratio of 100/5 = 20.A company's P/E (also known as its multiple) shows how high its shares are priced in relation to its historical earnings. Although mathematically, it relates share price to past performance, the reality is that P/Es are more about forward expectations than the past. A high P/E indicates that the City expects the company's earnings to grow fast in the future.P/E 're-ratings' by the City can have a dramatic effect on share price. If a company regarded as a growth stock announces sharply reduced trading figures, fund managers may revise their view of the company, and decide that it doesn't justify a growth stock P/E of 20, and can only justify a more normal P/E of, say 12. If earnings were 10p share, that re-rating would suggest a change in share price from 200p to 120p.Equally, if a company announces some major technical breakthrough, or a major contract, the City may decide that its future earnings potential justifies a growth P/E, and re-rate it upwards from 12 to 20 (or equivalent figures). In which case the share price will leap.There is nothing formal about this re-rating procedure. It is simply buyers in the market pushing up the price to reflect a new perception of a company. But P/Es do tend to be comparative, in that companies in the same sector with similar prospects would normally have similar P/Es. If they don't, there is invariably a reason accounting for the difference. Pretax earnings or profitsPretax earnings or profitsNet income before federal income taxes are subtracted. Band earningsBand earningsPay between the lower earnings limit and upper earnings limit which is used to determine National Insurance Contributions. Further Suggestionstaxable earningsprice earnings growth factor retained earnings Earnings before interest and, taxes (EBIT) Earnings before interest, taxes, and depreciation (EBITD) Primary earnings per (common) share Quality of earnings Earnings momentum earnings factor Earnings Earnings price ratio Earnings before interest, taxes, depreciation, and amortization (EBITDA) Earnings retention ratio Earnings before interest after taxes (EBIAT) Normalized earnings State Earnings Related Pension Scheme Earnings yield normalised earnings earnings per share adjusted earnings Fully diluted earnings per shares net relevant earnings earnings Earnings lower earnings limit |
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