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Profit before income tax reflects the results of the entity’s investing and financing activities without the effect of a variable, in this case is a taxation (Birt et al. 2014). It measures the company’s profits before the company has to pay income tax by deducting expenses from revenue such as interest expenses and operating expenses except for income tax (Investopedia 2016). All of the company’s profit before tax includes operating, nonoperating, continuing operations and non-continuing operations ( Investopedia 2016). Because of the tax expense is constantly changing, it may differ for each company depending on the size, capital utilisation, or location which are the factors that determine how much income tax a business must pay. By measuring profit before paying income tax will help giving an investor an idea of changes in a company’s profits or earnings from year to year (Investopedia 2016). This subtotal is important to managers and financial analysts because it provides company’s performance for internal management and external users of financial data (Investopedia 2016). It also helps in comparing profitability against competing businesses with different levels (Keythman 2016). Therefore, profit before income tax is a performance measurement that emphasises general operations of a business, which gives an insight of the company performance and able to compare it over time. References Birt, J, Chalmers, K, Maloney, S, Brooks, A & Oliver, J 2014, Accounting: Business reporting for decision making, 5th edn, Wiley, Queensland, AUS. Investopedia 2016, Profit Before Tax - PBT, Investopedia, viewed 6 August 2016, . Keythman, B. 2016, ‘Differences between EBIT and profit before taxes’, Small Business Chron, view 6 August 2016, ....