What is ‘Earnings Before Interest & Tax – EBIT’
An indicator of a company’s profitability, calculated as revenue minus expenses, excluding tax and interest. EBIT is also referred to as “operating earnings”, “operating profit” and “profit before interest and taxes (PBIT).”
Explaining ‘Earnings Before Interest & Tax – EBIT’
EBIT measures the profit a company generates from its operations, making it synonymous with “operating profit.” By ignoring tax and interest expenses, it focuses solely on a company’s ability to generate earnings from operations, ignoring variables such as the tax burden and capital structure.
Further Reading
- Tax on earnings before interest and taxes instead of profit-fair, simple and competitive: a conceivable initiative of EU Member States for a common consolidated … – heinonline.org [PDF]
- The behavior of operating earnings in the Norwegian salmon farming industry – www.tandfonline.com [PDF]
- Economic Value Added as a measurement tool of financial performance – www.sciencedirect.com [PDF]
- The impact of potential nitrous oxide mitigation strategies on the environmental and economic performance of dairy systems in four New Zealand catchments – www.tandfonline.com [PDF]
- ECONOMIC VALUE ADDED (EVA): A PERFORMANCE MEASURE OF STRATEGIC FINANCE. – search.ebscohost.com [PDF]
