Business, Legal & Accounting Glossary
Earnings before interest and taxes (EBIT) is an indicator of financial performance. Earnings before interest and taxes can be computed as Gross Revenue – (Cost of Goods Sold + Selling, General, and Administrative Expense). Some analysts focus on earnings before interest and taxes rather than actual earnings. They argue that, since interest-rate levels and tax policies are beyond a company’s control, earnings before interest and taxes is a better gauge of financial performance than actual earnings. Other analysts emphasize that interest and expense, while susceptible to outside forces, are expenses like any other; thus actual earnings should take precedence over earnings before interest and taxes. Note that earnings before interest and taxes is often called operating profit or recurring profit.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Earnings Before Interest And Taxes are sourced/syndicated and enhanced from:
This glossary post was last updated: 9th February, 2020 | 0 Views.