Profit After Tax (PAT), often referred to as net income or the bottom line, is a critical financial metric indicating a company's earnings after all operating...
PAT represents a company's net earnings after all operating expenses, interest, and income tax expenses have been subtracted from its total revenue. It is the final profit figure reported on the income statement.
PAT is crucial as it reflects a company's actual profitability and financial health. It indicates the earnings available to shareholders, for reinvestment, or for distribution as dividends, directly influencing stock valuation and investment attractiveness.
PAT is typically calculated by taking a company's Profit Before Tax (PBT) and subtracting the applicable income tax expense. It's the culmination of revenues minus all costs, including operational, interest, and tax outlays.
Investors, financial analysts, management, creditors, and regulatory bodies use PAT to evaluate a company's performance, assess its capacity to generate returns, repay debts, and comply with financial standards.