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Why is EBIT important as a business KPI?
in Business Analytics by Platinum (104k points) | 5 views

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EBIT stands for Earnings Before Interest and Taxes. By taking interest payments and income taxes away from the profit figure it basically eliminates the effects of the different capital structures and tax rates used by different companies.

 

EBIT is very closely related to operating profit and often the same.

 

EBIT provides a profitability figure that is better comparable across companies. A further evolution is also taking out depreciation and amortisation (see EBITDA).

 

EBIT = Revenue - Operating Expenses

by Platinum (104k points)

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