Monday, June 8, 2009

Calculate Pretax Margin

What is the Pretax Margin?

In accounting, the pretax margin is a number that measures the operating efficiency of a company by using its accounting records. The pretax margin is expressed as a percentage of revenues earned. Since pretax margin illustrates the relationship between operating income and revenues, it is a measure of the profitability of the company.

Calculate Pre-tax Margin

Pretax margin = (Operating income + other income − interest)/ Sales

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