Earnings Before Interest and Taxes (EBIT)

The Economic Times  Apr 28  Comment 
Revenue at HCL's infrastructure services business grew 3.9% in constant currency while in the engineering and R&D services business grew 1.9% during Q3.
newratings.com  Mar 30  Comment 
LEVALLOIS-PERRET (dpa-AFX) - French speed-train maker Alstom SA (AOMFF.PK, ALS.L) unveiled its strategy and objectives for 2020. It projects adjusted EBIT margin should reach around 7% by 2020 driven by volume, portfolio mix and results of...
newratings.com  Aug 4  Comment 
After a Good First Half-Year, Continental Increases Forecast for Adjusted EBIT Margin to Around 11% DGAP-News: Continental AG / Key word(s): Half Year Results After a Good First Half-Year, Continental Increases Forecast for Adjusted EBIT Margin...
newratings.com  May 22  Comment 
BIRMINGHAM (dpa-AFX) - Severn Trent PLC (SVT.L) reported Group profit before interest and tax, or PBIT, of 521.6 million pounds for the year ended 31 March 2015, compared to 508.6 million pounds, last year, an increase of 2.6%. Group profit...
Automotive World  Jan 12  Comment 
Automotive supplier publishes preliminary key figures for 2014 fiscal year Sales grow to around €34.5 billion despite negative exchange rate effects Outlook for 2015: aim to increase sales by approximately 5% In the 2014 fiscal year, the...
newratings.com  Oct 23  Comment 
InVision AG Release Preliminary Nine-Months Results: EBIT Increases by 175%, EBIT Margin at Record Levels DGAP-News: InVision AG / Key word(s): Preliminary Results/9-month figures InVision AG Release Preliminary Nine-Months Results: EBIT...
newratings.com  Jul 16  Comment 
Continental Increases Forecast for Adjusted EBIT Margin to Around 11% after Good First Half-Year DGAP-News: Continental AG / Key word(s): Half Year Results Continental Increases Forecast for Adjusted EBIT Margin to Around 11% after Good First...
Reuters  Aug 8  Comment 
Austrian energy group OMV posted a 82 percent increase in quarterly operating profit, beating market forecasts, as production returned to nearly normal in Libya and crude oil prices fell, boosting its refining margin.
Reuters  Jul 19  Comment 
Poland's top refiner, PKN Orlen , expects its second-quarter operating profit to fall more than forecast by analysts, it said on Thursday.
Reuters  Jul 12  Comment 
Norwegian offshore rig company Fred. Olsen Energy posted a second-quarter operating profit above expectations on Thursday and said tendering activity had been high within all floater segments.


Earnings Before Interest and Taxes (EBIT) is a company's earnings before it pays taxes or makes interest payments on its debt.

EBIT = Operating Revenue – Operating Expenses + Non-operating Income OR

If the company does not have non-operating income, it can be inferred that EBIT is Operating Income

Operating Income = Operating Revenue – Operating Expenses

EBIT measures a company's earnings ability. Interest and Taxes depend a lot on a company's capital structure - management's decision whether to fund the business with debt or equity. Because companies can change their capital structure without too much difficulty, metrics which are not "capital structure neutral" -- ie, which are impacted by capital structure -- make it difficult to compare one company to another, as different companies may have different mixes of debt and equity. Because it excludes Interest and Taxes, EBIT is "capital structure neutral" and is therefore a more appropriate way of comparing the earnings of different companies than net income is.

EBIT measures a company's earning power from ongoing operations and it largely used by investor because it excludes the effects of different capital structures and tax rates used in different companies. By excluding both interest and income tax expenses, the metric measures the company's ability to profit and as a result makes it easier for investors to compare companies.

EBIT is also (but less commonly) known as Profit Before Interest and Taxes (PBIT).

A variation on EBIT is EBITDA - or Earnings Before Interest, Taxes, Depreciation and Amortization, which is similar to EBIT but also excludes depreciation in a company's assets and any capital expenditures which is is amortizing.


See also

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