EBIT

SMB M&A term · what is ebit

DefinitionEBIT is earnings before interest and taxes — a company’s operating profit after depreciation and amortization but before financing and tax effects. It sits between operating income and EBITDA, and it matters most when a business is capital-intensive: unlike EBITDA, EBIT keeps the cost of using up equipment in the picture, which is a more honest read on businesses that must keep reinvesting to operate.
FormulaEBIT = Net income + Interest + Taxes