Simulations Plus Inc (SLP)

Pretax margin

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Earnings before tax but after interest (EBT)	US$ in thousands	11,695	15,115	11,085	11,387	10,556
Revenue	US$ in thousands	59,577	53,906	46,466	41,589	33,970
Pretax margin		19.63%	28.04%	23.86%	27.38%	31.07%

August 31, 2023 calculation

Pretax margin = EBT ÷ Revenue
= $11,695K ÷ $59,577K
= 19.63%

The pretax margin of Simulations Plus Inc. has experienced some fluctuation over the past five years. In 2023, the pretax margin stood at 19.63%, representing a decrease from the previous year's 28.04%. This downward trend indicates a reduction in the company's ability to generate profits before accounting for taxes, which may be a cause for concern. The pretax margin in 2023 is also lower than the figures recorded in 2021 and 2022, suggesting a potential erosion of profitability. Further examination of the company's cost structure and revenue generation capabilities would be necessary to understand the underlying reasons for the declining pretax margin.