PAT Full Form in Share Market

What is the Full Form of PAT in the Share Market?

The PAT full form in the share market is profit after tax. This term refers to the profit available for the shareholders of equity stocks. This serves as a crucial indicator of the profits that the company makes during its year of operation. This financial ratio is generally calculated on a per-share basis.

Importance of PAT:

PAT serves as an exceptional indicator of the financial performance of the company. It also measures its profitability and its ability to generate profits. It is also a metric of how best the company is able to handle its finances and effectively meet its tax liabilities. PAT also serves as a determinant of profit distribution and indicates the financial position of the company. Financial experts also use PAT to measure the performance of the company against its competitors.

How is PAT calculated?

PAT is calculated through the operational income of the company minus its tax. The operational income is the measure of the gross profits of the organization minus its operational expenses. By calculating PAT, the company will be able to ascertain its final profits, which it can use for paying dividends or for reinvestment.