Definition
Operating income that excludes financing costs and tax expenses, providing a clearer view of operational performance. It's EBITDA's more conservative cousin that remembers depreciation and amortization are real expenses.
Example Usage
The company reported EBIT of $100 million, though interest expenses consumed half of that amount.
Origin
Financial metric developed in mid-20th century for comparing companies with different capital structures
Fun Fact
EBIT is sometimes called operating profit, though accountants will argue about subtle definitional differences until everyone else falls asleep.
Source: Financial statement analysis terminology
Related Terms
Translate This Term
See “earnings before interest and taxes” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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