EBIT Calculator (Earnings Before Interest and Taxes)
From net income plus interest and tax, compute EBIT — operating profit before financing and tax effects.
Input Data
Results
At a glance:EBIT = net income + interest expense + income tax. It measures operating profit before financing (interest) and tax effects, so firms with different debt levels and tax regimes can be compared on core operating performance. EBIT is also the numerator of interest coverage (EBIT / interest). WARNING: Still includes depreciation/amortisation (non-cash); EBITDA adds those back; EBIT ≠ cash flow. Education, not advice.
Formula
EBIT = net income + interest expense + income tax.
Interest coverage = EBIT / interest expense (derived metric).
How to Use
- Enter net income (after all expenses, interest and tax).
- Enter interest expense and income tax.
- View EBIT.
FAQ
Why add back interest and tax to get EBIT?
Interest is set by capital structure, tax by jurisdiction — neither reflects operating quality. Adding them back (removing their effect) lets firms with different debt/tax profiles be compared on operating performance, which is why EBIT is widely used in analysis.
How is EBIT different from EBITDA?
EBIT still includes depreciation/amortisation (non-cash); EBITDA adds those back, closer to operating cash. Asset-heavy firms show a large gap. EBIT is more conservative (recognises asset wear); EBITDA looser. Best viewed together.
Can EBIT assess solvency?
As a reference: interest coverage = EBIT / interest expense; higher is safer. But EBIT is not cash (includes depreciation), so strict solvency needs actual cash flow (EBITDA or operating cash flow coverage of interest and principal).
Where do I find a HK company's EBIT?
Listed companies' income statements (consolidated) are on HKEXnews or investor-relations pages. 'Operating profit' is roughly EBIT; if only net profit is shown, use this tool's add-back method (add finance costs and tax). Watch disclosurebasis — one-offs, investment-property revaluation etc. may be mixed in.
Is EBIT the same as operating profit?
Conceptually close and often used interchangeably, but strictly different. Operating profit = revenue - operating costs - operating expenses (operating items only). EBIT = profit before interest and tax, and may include non-operating income like interest income. For mostly-operating firms the difference is small; for those with large investments/one-offs, it can be material — check the definition.
Related Tools
References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.