Urgent: EBIT
Guys,
When I show EBIT for a company, should it be before goodwill and impairments or after?
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What do you mean by goodwill for the income statement? Impairments are usual non-recurring and should be stripped out anyway.
wtf? no, take out goodwill/impairments/etc
EBIT & EBITDA are the proxy cash flow metrics for cash generated via operations. Most generally, EBIT entails Sales / Revenues - Cost of Goods Sold = Gross Profit - Cost of Operations (i.e. SG&A) = Income Generated from Continuing Operations.
Your typical income statement will have a lot of pre-op. income items that would be scrubbed out for comps purposes. Typically you remove any item that isn't attributable to the firms operations. With EBIT you may have circumstances where you'd leave in goodwill, if it's in the form of amortization of goodwill from an acquisition or something. But any extrodinary, one time, legal related, gain / lose on sale or mark to market (dependent on industry) item is taken out of EBIT, again, in general.
well, its a company that invests in insurance assets. they report "goodwill on bargain purchase" underneath the traditional EBIT and they add it to call the sum "result of operating activities". Since it is an investment company, they seem to be incurring this goodwill thing every year.
so, basically in this case, their "result of operating activities" is EBIT?
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