EBIT

(noun)

Earnings before interest and taxes.

Related Terms

Examples of EBIT in the following topics:

  • Times Interest Earned Ratio

    • Times Interest Earned Ratio = (EBIT or EBITDA) / (Required Interest Payments), and is indicative of a company's financial strength.
    • Times Interest Earned Ratio = Earnings before Interest and Taxes (EBIT) / Interest Expense.
    • Analysts will sometimes use EBITDA instead of EBIT when calculating the Times Interest Earned Ratio.
    • EBITDA can be calculated by adding back Depreciation and Amortization expenses to EBIT.
    • If Company A's EBIT is 750,000 and its required interest payments are 150,000, itsTimes Interest Earned Ratio would be 5.

  • Analyzing Long-Term Liabilities

  • Income Statement Analyses

    • It may be calculated as either EBIT or EBITDA divided by the total interest payable.