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.

No programming experience? With the Finance Toolkit MCP server, AI assistants such as Claude and ChatGPT can calculate the EBT to EBIT for you. Just ask in plain English.

Calculate the EBT to EBIT in Python

The EBT to EBIT is available in the Ratios module of the open-source Finance Toolkit. Install it 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

get_EBT_to_EBIT 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.
Income Quality Ratio Return on Tangible Assets (RoTA) Return on Capital Employed (RoCE) Net Income per EBT Free Cash Flow Operating Cash Flow Ratio Tax Burden Ratio EBIT to Revenue Cash Tax Rate Tax Rate Divergence EBITDA Margin Free Cash Flow Margin Cash Return on Assets (CRoA)

The Ratios module page introduces the module, and the sidebar lists all of its functions.

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