EBIT (Earnings Before Interest and Taxes)
earnings before interest and taxes or ebit takes a company's revenue or earnings and subtracts its cost of goods sold and operating expenses. the resulting figure, ebit, is also called operating earnings, operating profit or operating income. another way to calculate ebit is to take net income and add back the interest and taxes the company paid. investors can find the data required to calculate ebit on the company's income statement. if ebit is unsatisfactory, the company will need to either increase its revenues, decrease its expenses or both to improve its performance. ? owns a company that makes board games. to calculate his company's ebit, he takes his revenue, $10,000,000, and subtracts the cost of good sold, $2,000,000. his gross profit is $8,000,000. he then subtracts his operating expenses which include cost like employees' wages, research and development for new games, rent and employee benefits. these total $4,000,000. his ebit is $4,000,000. investors use ebit to compare the profitability of one company to another when they don't want to factor in companies' different capital structures and different tax rates. when comparing the ebits of different companies, it is important to know what the standard is for that industry. ebit is also used to compare performance within the same company from one period to another. in addition, ebit is an input in various financial calculations that are important to investors such as the interest coverage ratio, which shows how easily a company can pay its interest expenses, and the operating profit margin by dividing ebit by earnings.
- earnings before interest and taxes（ebit）・・・支払金利前税引前利益
- employee benefit・・・福利厚生
- fact in・・・～を計算に入れる
- capital structure・・・資本構成
- interest coverage ratio・・・インタレストカバレッジレシオ
- operating profit margin・・・営業利益率