EBIT measures the operating profit and thus shows the profitability of a business.
Alias | Profit before Interest and Taxes |
Abbreviation | EBIT |
Unit | Currency (Euro/Dollar/YEN/...) |
Calculation
EBIT is calculated by deducting all operating and non-operating expenses except interest and taxes from revenue.
Revenue
- Expenses (interest & taxes included)
______________________________
EBIT
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Example
The previous year a company had revenue of 440,000€ and expenses of 410,000€. EBIT will therefore be 30,000€.
440,000€
- 410,000€
_________
30,000€
_________