Revenue

• A company's revenue is the monetary income that it generates from the sale of its productive output to the market. Companies price their products with consideration to all fixed costs (for example, facility rent) and variable costs (for example, materials costs and electrical utilities) as well as market prices of similar products. The difference between the price of a product and the cost of producing it has a direct effect on a company's earnings.
  
  

Earnings Before Taxes

• A company's earnings before taxes (EBT) is simply the gross revenue a company generates in a given quarter less all expenses due for that period in connection with generating revenue. Such expenses generally include salaries, rental cost of premises, machinery operation and depreciation costs, and the cost of raw materials.
  
  

Taxes and Shareholders

• A company's EBT fluctuates from quarter to quarter. If a company reports a loss in a given quarter, it means that the revenue it generated was not high enough to cover related expenses. Shareholders experience higher dividend benefits when a company reports a relatively higher EBT. Shareholders should be aware that taxes diminish dividend payments per share.
  
  

Investors

• Investors and prospective investors alike examine historical fluctuations in a company's EBT as a way to evaluate its viability as a source of capital growth through gains in market value or income from cash dividends. It is important that investors not confuse EBT with EBIT (earnings before interest and taxes), which also accounts for a company's interest obligations.