Earnings Before Interest and Taxes (EBIT)

Corporate Finance Financial Statements Financial Terms Dictionary

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EBIT (earnings before interest and taxes) represents the company’s net income before income tax and interest expenses.

EBIT is used to analyze the effectiveness of the company’s core business without taking into account capital structure costs and tax expenses that affect profits.
EBIT is also known as operating income as it excludes interest expense and taxes from its calculations. However, there are times when operating income may differ from EBIT.