Pretax margin %

Pretax margin in percent is a financial metric that measures a company's profitability by calculating the percentage of pretax income to total revenue. It indicates the company's ability to generate earnings from its sales before considering taxes. A higher pretax margin percentage suggests that a company is more profitable and has a competitive advantage in its industry.

Pretax margin % = Pretax income / Total revenue

Pretax income is the company's income before taxes, calculated by subtracting total operating expenses, interest, and depreciation from total revenue.

If Total revenue is zero or negative, the formula will return an empty value, as the Pretax margin would be undefined or not meaningful in such cases.

Pretax margin is essential because it helps evaluate a company's profitability and compare it with its peers. A higher pretax margin can indicate a company's ability to maintain its pricing power, control costs, and invest in growth opportunities. Investors can use this metric to identify companies with strong profitability and potential for long-term growth.