In accounting and finance, earnings before interest and taxes (EBIT) is a measure of a firm's profit that includes all incomes and expenses (operating and non-operating) except interest expenses and income tax expenses.
Operating income and operating profit are sometimes used as a synonym for EBIT when a firm does not have non-operating income and non-operating expenses.
Formula
- EBIT = (net income) + interest + taxes = EBITDA – (depreciation and amortization expenses)
- Operating income = (gross income) – OPEX = EBIT – (non-operating profit) + (non-operating expenses) Net income is later obtained by subtracting interest and taxes from the result.
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|+ Example statement of income (figures in thousands)