Income Before Tax Profit Margin
Calculate the Pretax Profit Margin, which is the ratio of a company’s pre-tax profit to its revenue, indicating how much profit a company makes before paying taxes on its earnings.
The Pretax Profit Margin is calculated by dividing the pre-tax profit by the revenue. It provides insight into how efficiently a company is able to generate profits from its revenue.
The formula is as follows:
\[\text{Pretax Profit Margin} = \text{Income Before Tax} / \text{Revenue}\]Also known as: pretax margin, EBT margin.
Income Before Tax Profit Margin in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_income_before_tax_profit_margin as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["HSY", "GIS", "HRL"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_income_before_tax_profit_margin()
Or, after setting up the Finance Toolkit MCP, ask:
What were the pretax profit margins of Hershey, General Mills and Hormel Foods from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| GIS | 0.1749 | 0.1603 | 0.1568 | 0.1484 | 0.0179 |
| HRL | 0.0989 | 0.1026 | 0.0837 | 0.0869 | 0.0548 |
| HSY | 0.2003 | 0.184 | 0.1945 | 0.2208 | 0.1038 |
Parameters
get_income_before_tax_profit_margin accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of periods to sum flows (income and cash flow statement items) over, with balance sheet items averaged over the same number of period ends. E.g. 4 with quarterly data gives the trailing twelve months (TTM) and 3 with annual data a three-year cumulative figure. Defaults to None, which uses single-period flows (per quarter and not annualized with quarterly data). | 4 |