A financial measure where the letters stand for “Earnings Before Interest, Depreciation and Amortization.” The calculation involves a company’s before-tax income and the adding back of the previous 12 months of interest, depreciation, and amortization and can be calculated as revenue minus expenses excluding interest and taxes.
The formula for EBIT is:
EBIT = Revenue − COGS − Operating Expenses Or
EBIT = Net Income + Interest + Taxes
COGS = Cost of goods sold