Effective tax rate

What it measures¶

The effective tax rate is the income tax a company recorded for the year divided by its pre-tax income — its profit before tax. It is the share of profit that actually went to tax, which often differs from the headline rate of the country, because of tax credits, losses carried forward from earlier years, and profit earned in other countries.

Why it is on the page¶

A low or falling tax rate can lift profit without any change in the business, and it may not last. Reading it beside the margins tells you how much of a change in net income came from tax rather than operations. It also appears inside the DuPont decomposition as the "tax burden" (net income ÷ pre-tax income, which is one minus the effective rate when there are no other items).

Thresholds, their source and the population they were fitted on¶

The page draws no zones: the right rate depends on the countries a company earns in. The US federal rate for companies has been 21% since 2018; many companies pay less overall, some more.

• Fitted on: no population — a descriptive ratio.
• Evidence grade: not graded.

A worked example¶

Celestica, as the Fundamentals page showed it on 9 August 2026 (fiscal year 2025): a tax burden of 0.85 in the DuPont panel — about 15% of pre-tax profit went to tax.

What “No verdict” means here¶

The row carries no verdict of its own. It reads not applicable when pre-tax income is zero or a loss — a tax rate on a loss has no meaning — and insufficient data when the tax line is not stored.

What the verdict is and is not¶

The figure describes one year's tax as a share of profit. It is not a forecast of future tax and not an instruction to trade the shares.