Invertext Online Technical Dictionary




Definition 1

Acronym of earnings before interest and tax. Indicates a company's underlying profitability, by removing from the result of net revenues less expenses two items, interest and company tax, both of which are largely independent of the company's core operating performance: territorial location in the case of tax and prevailing bank rate in the case of interest. As such, EBIT is often used as shorthand for operating earnings or operating profit.

Source: Invertext

Context: An important factor contributing to the widespread use of EBIT is the way in which it nullifies the effects of the different capital structures and tax rates used by different companies.



operating earnings 1 , operating profit 1

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