EBIT Calculator
EBIT is earnings before interest and taxes. It shows what the business earns from its own work, before the cost of borrowing and the tax bill. Start from net income or from revenue, whichever figure you have.
- Free
- Works offline after your first visit
- Saves on this device
- No sign-up
- Updated
How it works
From net income, add back interest and income taxes. From revenue, take off the cost of goods sold, then take off operating expenses.
The margin is EBIT divided by revenue, times 100. The margin uses the revenue box in either route.
Worked example
With revenue of $500,000.00, EBIT comes to $110,000.00, an EBIT margin of 22%.
Questions
Is EBIT the same as operating profit?
Usually, yes. Both count what is left after running costs, before interest and taxes. Some companies place one-off items differently, so check the statement.
Why add back interest?
Interest depends on how the business is paid for, not on how well it runs. Leaving it out lets you compare businesses with different loans.
Where do I find these figures?
They are on the income statement, sometimes called the profit and loss statement.
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