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).
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