Profit after-tax

Profit after-tax is the earnings of a business after all income taxes have been deducted. This amount is the final, residual amount of profit generated by an organization. The profit after-tax figure is considered the best measure of the ability of an entity to generate a return, since it incorporates both operating income and income from other sources, such as interest income.

The profit after-tax margin is closely watched by investors to see if the income-generating ability of a firm is changing over time. If so, this could be considered a valuation indicator that may result in a change in the stock price.

If a company is publicly-held, it also reports profit after-tax on a per share basis. This information appears on the face of the income statement.

Similar Terms

Profit after-tax is also known as net profit after tax.