Profitability
Pretax income
What it is
Profit once everything is paid except corporate income tax: after cost of sales, operating expenses, interest on debt and exceptional items. It is the last line the tax authorities have not yet touched.
How to read it
Compared with net income, it reveals the effective tax rate. A small gap signals favourable taxation — sometimes durable, sometimes not.
What it does not tell you
An unusually low tax rate thanks to past loss carryforwards will eventually normalise, mechanically weighing on future earnings.
Other measures — Profitability
Educational content. Polaris is not a registered investment adviser and makes no recommendation.