Earnings Before Interest and Taxes

In finance, earnings before interest and taxes, is a measure of an company's benefit that precludes interest and income tax expenses. EBIT is the difference between working incomes and working liabilities.

Calculator of Earnings Before Interest and Taxes

Formula of Earnings Before Interest and Taxes

EBIT = R - E

Where,

• R = Sales Revenue
• E = Operating Expenses

Example of Earnings Before Interest and Taxes

A company has sales of $500000 with operating costs of $400000. Calculate the Earnings Before Interest and Taxes (EBIT).

Given

Sales Revenue (R) = $500000 Operating Expenses (E) = $400000

To Find

Earnings Before Interest and Taxes

Solution

EBIT = R - E = $500000 - $400000 = $100000