EBIT (Earnings Before Interest and Taxes)
Definition
EBIT (Earnings Before Interest and Taxes) is a measure of a entity's profitability that excludes interest and income tax expenses. Interest and taxes are excluded because they include the effect of factors other than the profitability of operations. EBIT (also called operating profit) shows an entity's earning power from ongoing operations.
Calculation (formula)
EBIT = Profit (loss)* + Finance costs + Income tax expense*
* from continuing operations
Exact Formula in the ReadyRatios Analytic Software
EBIT = F2[ProfitLossBeforeTax]+ F2[FinanceCosts]
F2 – Statement of comprehensive income (IFRS).
Start free ReadyRatios
financial analysis now!
start online
No registration required!
But once registered, additional features are available.
What does the F2 mean in the formula?
Accounting Term changed over time. Now it is called Statement of Comprehensive Income.