EBIT
Business & Finance abbreviation · Accounting
| Stands for | Earnings before interest and taxes |
|---|---|
| Categories | Business & Finance |
EBIT stands for Earnings before interest and taxes, an accounting abbreviation.
Measure of a company's operating profit, calculated as net income plus interest expense and income taxes, or as revenue minus operating expenses. It shows how much the core business earns before the effects of capital structure and taxation.
Example: EBIT margin improved to 14 percent as higher prices offset rising labor costs.
Usage notes
Pronounced "EE-bit." EBIT is often used interchangeably with operating income, although the two can differ when non-operating items such as investment gains are included. It feeds the interest coverage ratio and the EV/EBIT valuation multiple. When presented as a non-GAAP measure in SEC filings, it must be reconciled to net income.
Related abbreviations
More accounting abbreviations
- CVP – Cost-volume-profit analysis
- CY – Calendar year
- D&A – Depreciation and amortization
- Dr – Debit
- DTA – Deferred tax asset
- DTL – Deferred tax liability
- EBITDA – Earnings before interest, taxes, depreciation and amortization
- EBITDAR – Earnings before interest, taxes, depreciation, amortization and rent…
- EBT – Earnings before taxes
- EPS – Earnings per share
- FASB – Financial Accounting Standards Board
- FIFO – First in, first out