EBITKnowledge Center |
24 items • 659.340 visits
Sign up for free
Welcome to the Earnings Before Interest and Tax center of 12manage.
Here we exchange knowledge and experiences in the field of Earnings Before Interest and Tax.
❗Sign up now to gain access to 12manage. It's completely free.
What is EBIT?Earnings Before Interest and Tax includes all profits from operations, before interest and income taxes are deducted. Normally, non-operating profits and non-operating expenses are not included in EBIT. Earnings Before Interest and Tax (EBIT) is a traditional measurement method that does not include the cost of capital. Other words for EBIT are Operating Profit and Operating Earnings. Calculation of EBITThe formula of EBIT is straightforward: Net Sales - Operating Expenses ------------------------------------------------------ Operating Profit (EBIT) An advantage of EBIT is it is easy to calculate and observe at divisional or sub divisional levels of the firm. A disadvantage of EBIT is it does not include the cost of capital. Compare EVA, CFROI and Economic Margin, which are all including the cost of capital. Instead of EBIT, also the terms Operating Profit and Operating Earnings are widely used. Book: Steven M. Bragg - Business Ratios and Formulas : A Comprehensive Guide Book: Ciaran Walsh - Key Management Ratios
Compare with: EBITDA | P/E Ratio | PEG Ratio | Relative Value of Growth | Economic Value Added | Economic Margin | Cash Ratio | Current Ratio | Earnings Per Share | Return on Equity | Return on Invested Capital | Market Value Added | CFROI | Fair Value | TSR Return to Management Hub: Decision-making & Valuation | Finance & Investing |
|
About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2024 12manage - The Executive Fast Track. V17.2 - Last updated: 20-5-2024. All names ™ of their owners.