Answers the Question
How profitable is a company?
Calculator for EBIT
What Is the EBIT?
EBIT (earnings before interest and taxes) looks at the basic earnings for a firm's operations.
Why Is it Important?
- EBIT presents an excellent window into the profitability of a firm.
Formula(s) to Calculate EBIT
- EBIT = OPERATING REVENUE - OPERATING EXPENSES + NON OPERATING INCOME
- Not being consistent with the method used for valuing inventory management (FIFO, LIFO, etc).
- Not considering the effects of interest and taxes as part of a more holistic analysis.