EBT to EBIT
Calculate the EBT to EBIT, which is the ratio of a company’s earnings before tax to its earnings before interest and taxes, indicating how much of a company’s earnings are generated before paying interest on debt.
The EBT to EBIT ratio measures the proportion of a company’s earnings that is generated before paying interest and taxes. It provides insights into how a company’s operating performance is impacted by interest expenses and tax obligations. A higher ratio indicates that a larger portion of the company’s earnings is generated from its core operations before considering interest payments and taxes.
The formula is as follows:
\[\text{EBT to EBIT} = (\text{Net Income} + \text{Income Tax Expense}) / (\text{Net Income} + \text{Income Tax Expense} + \text{Interest Expense})\]Also known as: EBT to EBIT, interest burden.
EBT to EBIT in Python
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_EBT_to_EBIT as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")
ebt_to_ebit_ratios = toolkit.ratios.get_EBT_to_EBIT()
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| AAPL | 0.9764 | 0.976 | 0.9666 | 1 | 1 |
| TSLA | 0.9438 | 0.9863 | 0.9846 | 0.9624 | 0.9392 |
Parameters
The function accepts the following parameters:
- rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
- growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
- lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
- standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
- trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.