imported>TonySt: Reverting editing test by ~2025-36942-73 (CVPI)

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Reverting editing test by ~2025-36942-73 (CVPI)

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	{{Short description\|Measure of a firm's profit}}In [[accountancy\|accounting]] and finance, '''earnings before interest and taxes''' ('''EBIT''') is a measure of a firm's [[profit (accounting)\|profit]] that includes all incomes and expenses (operating and [[Non-operating income\|non-operating]]) except [[interest]] expenses and [[income tax]] expenses.<ref name="Essentials">{{cite book		{{Short description\|Measure of a firm's profit}}
			{{Accounting}}

			In [[accountancy\|accounting]] and finance, '''earnings before interest and taxes''' ('''EBIT''') is a measure of a firm's [[profit (accounting)\|profit]] that includes all incomes and expenses (operating and [[Non-operating income\|non-operating]]) except [[interest]] expenses and [[income tax]] expenses.<ref name="Essentials">{{cite book
	\| title=Essentials of Investments		\| title=Essentials of Investments
	\| url=https://archive.org/details/isbn_9780072503678		\| url=https://archive.org/details/isbn_9780072503678
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	\| last3=Marcus		\| last3=Marcus
	\| publisher=[[McGraw Hill]]		\| publisher=[[McGraw Hill]]
	\| year=~~2005~~		\| year=2004
	\| page=[https://archive.org/details/isbn_9780072503678/page/452 452]		\| page=[https://archive.org/details/isbn_9780072503678/page/452 452]
	\| isbn=9780072510775}}</ref><ref>{{Cite web\|url=https://www.nasdaq.com/glossary/e/earnings-before-interest-and-taxes\|title=Earnings before interest and, taxes (EBIT)\|publisher=[[NASDAQ]] ~~\|url-status=live \|archive-url= https://web.archive.org/web/20230605113642/https://www.nasdaq.com/glossary/e/earnings-before-interest-and-taxes \|archive-date= Jun 5, 2023~~ }}</ref>		\| isbn=9780072510775}}</ref><ref>{{Cite web\|url=https://www.nasdaq.com/glossary/e/earnings-before-interest-and-taxes\|title=Earnings before interest and, taxes (EBIT)\|publisher=[[NASDAQ]]}}</ref>

	'''Operating income''' and '''operating profit''' are sometimes used as a [[synonym]] for EBIT when a firm does not have [[non-operating income]] and non-operating expenses.<ref name="investopedia">{{Cite web\|url=https://www.investopedia.com/ask/answers/012015/what-difference-between-ebit-and-operating-income.asp\|title=How are EBIT and operating income different?\|first=Chris B.\|last=Murphy\|date=2019-07-11\|publisher=[[Investopedia]]}}</ref>		'''Operating income''' and '''operating profit''' are sometimes used as a [[synonym]] for EBIT when a firm does not have [[non-operating income]] and non-operating expenses.<ref name="investopedia">{{Cite web\|url=https://www.investopedia.com/ask/answers/012015/what-difference-between-ebit-and-operating-income.asp\|title=How are EBIT and operating income different?\|first=Chris B.\|last=Murphy\|date=2019-07-11\|publisher=[[Investopedia]]}}</ref>
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	== Earnings before taxes ==		== Earnings before taxes ==
	~~{{citation needed span\|date=March 2024\|~~'''Earnings before taxes''' ('''EBT''') is the money ~~earned~~ by the firm before deducting the money to be paid for [[taxes]]. EBT ~~takes into account~~ the money paid for [[interest]]. Thus, it can be calculated by subtracting the interest from EBIT (earnings before interest and taxes).}}		'''Earnings before taxes''' ('''EBT''') is the money retained by the firm before deducting the money to be paid for [[taxes]]. EBT excludes the money paid for [[interest]]. Thus, it can be calculated by subtracting the interest from EBIT (earnings before interest and taxes).

	== See also ==		== See also ==
	~~{{Wikidata property\|P3362}}~~
	* [[EBITA\|Earnings before interest, taxes, and amortization]] (EBITA)		* [[EBITA\|Earnings before interest, taxes, and amortization]] (EBITA)
	* [[EBITD\|Earnings before interest, taxes, and depreciation]] (EBITD)		* [[EBITD\|Earnings before interest, taxes, and depreciation]] (EBITD)

2800:40:33:930:929:56FB:B929:1987: /* Overview */Fixed incorrect value, a zero was missing

2025-02-17T07:35:50Z

Overview: Fixed incorrect value, a zero was missing

New page

{{Short description|Measure of a firm's profit}}In [[accountancy|accounting]] and finance, '''earnings before interest and taxes''' ('''EBIT''') is a measure of a firm's [[profit (accounting)|profit]] that includes all incomes and expenses (operating and [[Non-operating income|non-operating]]) except [[interest]] expenses and [[income tax]] expenses.<ref name="Essentials">{{cite book
| title=Essentials of Investments
| url=https://archive.org/details/isbn_9780072503678
| url-access=registration
| first1=Zvi
| last1=Bodie
| first2=Alex
| last2=Kane
| first3=Alan
| last3=Marcus
| publisher=[[McGraw Hill]]
| year=2005
| page=[https://archive.org/details/isbn_9780072503678/page/452 452]
| isbn=9780072510775}}</ref><ref>{{Cite web|url=https://www.nasdaq.com/glossary/e/earnings-before-interest-and-taxes|title=Earnings before interest and, taxes (EBIT)|publisher=[[NASDAQ]] |url-status=live |archive-url= https://web.archive.org/web/20230605113642/https://www.nasdaq.com/glossary/e/earnings-before-interest-and-taxes |archive-date= Jun 5, 2023 }}</ref>

'''Operating income''' and '''operating profit''' are sometimes used as a [[synonym]] for EBIT when a firm does not have [[non-operating income]] and non-operating expenses.<ref name="investopedia">{{Cite web|url=https://www.investopedia.com/ask/answers/012015/what-difference-between-ebit-and-operating-income.asp|title=How are EBIT and operating income different?|first=Chris B.|last=Murphy|date=2019-07-11|publisher=[[Investopedia]]}}</ref>

== Formula ==
*EBIT = (net income) + interest + taxes = [[Earnings before interest, taxes, depreciation, and amortization|EBITDA]] – (depreciation and amortization expenses)
*operating income = ([[gross income]]) – [[Operating expense|OPEX]] = EBIT – (non-operating profit) + (non-operating expenses)<ref name="investopedia" />
where
*EBITDA = earnings before interest, taxes, depreciation, and amortization
*OPEX = operating expense

== Overview ==
A professional investor contemplating a change to the [[capital structure]] of a firm (e.g., through a [[leveraged buyout]]) first evaluates a firm's fundamental earnings potential (reflected by earnings before interest, taxes, depreciation and amortization ([[Earnings before interest, taxes, depreciation, and amortization|EBITDA]]) and EBIT), and then determines the optimal use of debt versus equity (equity value).

To calculate EBIT, expenses (e.g. the [[cost of goods sold]], selling and administrative expenses) are subtracted from revenues.<ref>{{cite web|url=http://www.investorwords.com/1631/EBIT.html|title=What is EBIT? definition and meaning|website=investorwords.com|access-date=2019-10-03}}</ref> [[Net income]] is later obtained by subtracting interest and taxes from the result.

{| class="wikitable"
|+ Example statement of income (figures in thousands)<ref name="Essentials"/>
|-
! style="text-align:left;background-color:#ffd700;" colspan="2"| Revenue
|-
| style="padding-left:2.0em;" | Sales revenue
! style="text-align:right;" | $20,438
|-
| style="padding-left:2.0em;" | [[Cost of goods sold]]
! style="text-align:right;" | $7,943
|-
! style="text-align:left;" | Gross profit
! style="text-align:right;" | $12,495
|-
! style="text-align:left;background-color:#c0c0c0;" colspan="2"| Operating expenses
|-
| style="padding-left:2.0em;" | Selling, general and administrative expenses
! style="text-align:right;" |$8,172
|-
| style="padding-left:2.0em;" | [[Depreciation]] and [[amortization (accounting)|amortization]]
! style="text-align:right;" |$960
|-
| style="padding-left:2.0em;" | Other expenses
! style="text-align:right;" |$138
|-
| style="background-color:#cc9966; font-weight:bold;padding-left:2.0em;text-align:left;" | Total operating expenses
| style="background-color:#cc9966; font-weight:bold;text-align:right;" | $9,270
|-
! style="text-align:left;" | Operating profit
! style="text-align:right;" | $3,225
|-
| style="padding-left:2.0em;" | Non-operating income
! style="text-align:right;" |$130
|-
! style="text-align:left;" | Earnings before interest and taxes (EBIT)
! style="text-align:right;" | $3,355
|-
| style="padding-left:2.0em;" | Financial income
! style="text-align:right;" |$45
|-
! style="text-align:left;" | Income before interest expense (IBIE)
! style="text-align:right;" | $3,400
|-
| style="padding-left:2.0em;" | Financial expense
! style="text-align:right;" |$190
|-
! style="text-align:left;" | Earnings before income taxes (EBT)
! style="text-align:right;" | $3,210
|-
| style="padding-left:2.0em;" | [[Income tax]]es
! style="text-align:right;" |$1,027
|-
! style="background-color:#9acdff;text-align:left;" | Net income
! style="background-color:#9acdff;text-align:right;" | $2,183
|}

== Earnings before taxes ==
{{citation needed span|date=March 2024|'''Earnings before taxes''' ('''EBT''') is the money earned by the firm before deducting the money to be paid for [[taxes]]. EBT takes into account the money paid for [[interest]]. Thus, it can be calculated by subtracting the interest from EBIT (earnings before interest and taxes).}}

== See also ==
{{Wikidata property|P3362}}
* [[EBITA|Earnings before interest, taxes, and amortization]] (EBITA)
* [[EBITD|Earnings before interest, taxes, and depreciation]] (EBITD)
* [[EBITDAR|Earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs]] (EBITDAR)
* [[EBITDA|Earnings before interest, taxes, depreciation, and amortization]] (EBITDA)
* [[EV/EBITDA]]
* [[OIBDA|Operating income before depreciation and amortization]] (OIBDA)

==References==
{{Reflist}}

[[Category:Fundamental analysis]]
[[Category:Profit]]

Earnings before interest and taxes - Revision history

imported>TonySt: Reverting editing test by ~2025-36942-73 (CVPI)

2800:40:33:930:929:56FB:B929:1987: /* Overview */Fixed incorrect value, a zero was missing