Earnings Before Interest and Taxes (EBIT)

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newratings.com  8 hrs ago  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.
Reuters  Oct 21  Comment 
Poland's top refiner PKN Orlen expects its third quarter operating profit to drop to around 750 million zlotys ($233.24 mln) from 789 million zlotys a year earlier, the company said on Friday.
Reuters  Aug 25  Comment 
Three months to end-June (millions of U.S. dollars unless stated)
Reuters  Aug 17  Comment 
Danish wind turbine manufacturer Vestas three-month results to end-June (millions of euros unless stated otherwise):
BusinessWeek  Feb 16  Comment 
Daimler AG, the world’s second- largest maker of luxury cars, said 2011 earnings before interest and taxes will “clearly” exceed 2010 levels.




 
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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.

Example

See also

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