ACCOUNTING GLOSSARY
EBT
Earnings Before Tax
Profit remaining after interest expense but before income tax.
What does EBT mean?
Profit remaining after interest expense but before income tax. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
EBT in context
A company with $500,000 operating profit and $80,000 interest expense has $420,000 EBT.
Why it matters in financing
EBT can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related accounting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.