# Pretax Margin

Pretax income as a percentage of revenue. Used for banks.

## Definition

Pretax margin shows operating profitability before income taxes. For banks specifically, it's a more useful operational measure than FCF margin (which doesn't translate well to a balance-sheet-led business).

## Formula

(Pretax Income ÷ Revenue) × 100

## Why it matters

Pretax margin strips out tax-rate differences across jurisdictions and time periods, isolating operational performance. Useful when comparing banks across countries with different corporate tax regimes.

## How Standard Equity uses it

Compared with peers in the AI report for banks and broker-dealers, in place of operating margin.

## The metric

| Category   | Margins    |
| ---------- | ---------- |
| Unit       | %          |
| Applies to | Banks only |

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