Define: Earnings Before Interest And Taxes

UK Accounting Glossary

Definition: Earnings Before Interest And Taxes



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Full Definition of Earnings Before Interest And Taxes


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.


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Synonyms For Earnings Before Interest And Taxes


operating profit, recurring profit, ebit


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Earnings Before Interest And Taxes. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/earnings-before-interest-and-taxes/ (accessed: April 03, 2020).
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Earnings Before Interest And Taxes. PayrollHeaven.com. Retrieved April 03, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/earnings-before-interest-and-taxes/

Definition Sources


Definitions for Earnings Before Interest And Taxes are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February 2020.