EBIT

Definition

Earnings Before Interest and Taxes. A measure of a company's earning power from ongoing operations, equal to earnings before deduction of interest payments and income taxes. EBIT excludes income and expenditure from unusual, non-recurring or discontinued activities. In the case of a company with minimal depreciation and amortization activities, EBIT is watched closely by creditors, since it represents the amount of cash that such a company will be able to use to pay off creditors. also called operating profit.

Use EBIT in a sentence

Calculating EBIT is a figure that helps compare the success of different companies since it excludes interest and taxes.

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EBIT margin times interest earned