- 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 "operating income", as you can re-arrange the formula to be calculated as follows:
In other words, EBIT is all profits before taking into account interest payments and income taxes. An important factor contributing to the widespread use of EBIT is the way in which it nulls the effects of the different capital structures and tax rates used by different companies. By excluding both taxes and interest expenses, the figure hones in on the company's ability to profit and thus makes for easier cross-company comparisons.
EBIT was the precursor to the EBITDA calculation, which takes the process further by removing two non-cash items from the equation (depreciation and amortization).
Investment dictionary. Academic. 2012.
Look at other dictionaries:
earnings before interest, tax, depreciation and amortization — ˌearnings before ˌinterest, ˌtax, depreciˌation and amortiˈzation abbreviation EBITDA noun [plural] ACCOUNTING TAX a company s profits for a particular period of time, not including interest payments on its debt, tax payments, and amounts to… … Financial and business terms
Earnings Before Interest, Tax and Depreciation - EBITD — An indicator of a company s financial performance, which is calculated as: This measure attempts to gauge a firm s profitability before any legally required payments, such as taxes and interest on debt, are paid. Depreciation is removed because… … Investment dictionary
Earnings Before Interest, Tax, Amortization And Exceptional Items - EBITAE — An accounting metric often used to deduct the amortization of intangible assets to arrive at a value. Companies will use EBITAE not only as a measure of performance, but also to determine interest coverage capabilities. The eliminated items are… … Investment dictionary
Earnings Before Interest, Depreciation And Amortization - EBIDA — A measure of the earnings of a company that adds the interest expense, depreciation and amortization back to the net income number, but takes the tax expense into consideration. This measure is not as well known or used as often as its… … Investment dictionary
Earnings Before Interest, Taxes, Depreciation, Depletion, Amortization and Exploration Expenses - EBITDAX — An indicator of a company s financial performance calculated as: = Revenue Expenses (excluding tax, interest, depreciation, depletion, amortization and exploration expenses) EBITDAX is used when reporting earnings for oil and mineral exploration… … Investment dictionary
Earnings Before Interest, Taxes, Depreciation, Amortization, and Restructuring or Rent Costs - EBITDAR — A non GAAP indicator of a company s financial performance calculated as: = Revenue Expenses (excluding tax, interest, depreciation, amortization and restructuring or rent costs) Depending on the company and the goal of the user, the indicator can … Investment dictionary
Earnings before Depreciation, Interest and Tax (EBDIT) — Gewinn (Ergebnis der gewöhnlichen Geschäftstätigkeit) vor dem Abzug von Abschreibungen, Steuern und Zinsen. Das EBDIT soll Abschreibungspolitik, Verschuldungsgrad und Steuereffekte (u.a. latente Steuern) ausschalten und dadurch bessere Vergleiche … Lexikon der Economics
Earnings before Depreciation, Interest, Tax and Amortisation (EBDITA oder EBITDA) — um Geschäftswertabschreibungen (Amortisation) gemindertes ⇡ EBDIT … Lexikon der Economics
interest cover — fixed charge–coverage ratio A ratio showing the number of times interest charges are covered by earnings before interest and tax. For example, a company with interest charges of £12 million and earnings before interest and tax of £36 million… … Accounting dictionary
Tax Free — refers to certain types of goods and/or financial products (such as municipal bonds) that are not taxed and with earnings that are not taxed. The tax free status of these goods and/or funds may incentivize individuals and business entities to… … Investment dictionary
Tax — Taxation An aspect of fiscal policy … Wikipedia