This all-in-one online EBIT Calculator finds a company’s earnings before interest and tax (EBIT) as operating revenue minus operating expenses, excluding tax and interest. You can enter the values of any two known parameters in the input fields of this calculator and find the missing parameter.
Why is EBIT so important?
Earnings before interest and taxes (EBIT) is an indicator of a company’s profitability. It is also referred to as operating earnings, operating profit or profit before interest and taxes. The formula for EBIT is as follows:
EBIT = Operating Revenue − Operating Expenses
The EBIT calculation takes a company’s total operating revenue or sales revenue (minus cost of goods sold) and then subtracts the total operating expenses including cost of raw materials and employee wages.
By ignoring taxes and interest expense, EBIT focuses solely on a company’s ability to generate earnings from operations thus making it an especially useful metric.
Calculating EBIT is important for comparing a company performance against previous periods or competitor companies.
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