is Earnings Before Interest and Tax. EBIT is an indicator of a company's financial performance calculated as revenue less expenses excluding tax and interest. It is sometimes referred to as operating earnings.
EBIT (Earnings Before Interest and Taxes) represents the balance between the operating income and the operating expenses. It represents the increase in wealth created by the industrial and commercial activity of the company. It differs from the trading profit because depreciations and provisions are included in the calculation. The EBIT are shared between financial expenses, corporation tax, dividends and earnings put into reserves.
This method assumes the Earnings before interest and taxes are normalized to remove: non-recurring income and expenses; non-operating income and expense; owners total compensation is adjusted to market value
EBIT is earnings before interest and taxes. EBIT is calculated by subtracting costs of sales and operating expenses from revenues. EBIT is often used to gauge the financial performance of companies with high levels of debt and interest expenses.