What is Earnings Before Interest & Tax (EBIT)?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

EBIT stands for Earnings Before Interest & Tax and is a common indicator of the profitability of a firm.

The calculation is Operating Income + Stock-Based Compensation, or Revenue - Operating Expenses - Depreciation - Amortization.

The reason behind using EBIT is because it allows you to see the profitability of a company regardless of the tax rate or capital structure.

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Patrick Curtis

Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.