How to Calculate Pre-Tax Profit With Net Income and Tax Rate

By Motley Fool Staff – Updated Apr 30, 2025 at 10:02 PM EST

Key Points

Pre-tax profit is a firm's income before taxes, found on the income statement.
Calculate pre-tax profit by adjusting net income for the effective tax rate.
Alternatively, adjust operating income by adding/subtracting interest and unusual items.

Pre-tax profit is a company's operating profit after interest on debt has been paid (plus any unusual items) -- but before taxes are paid.

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This little-understood financial statement can contain important investor information.

Here's how to determine how much a company pays to borrow money.

The net worth of a business is also known as its book value or its owners' (stockholders') equity.

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