Probably operating profit...which is EBIT. Tells you the income from operations while disregarding interest/tax considerations.

"Look, you're my best friend, so don't take this the wrong way. In twenty years, if you're still livin' here, comin' over to my house to watch the Patriots games, still workin' construction, I'll fuckin' kill you. That's not a threat, that's a fact.
 
Best Response
kidflash:

either EBITDA or EBIT depending on the company/industry, imo (yes, I know EBITDA is BS 99% of the time so you need to take it with a grain of salt). I think the point of the question is to find the closest line item that's a proxy for FCFF

Yes, however, no GAAP income statement will ever have EBITDA on it. They probably want to see your knowledge of what exactly is on the IS, as well as what each line item means. You would have to know that operating profit is on the IS, that it is the same as EBIT, and that EBIT measures the income from operations of a business.

After that, you can then explain how you would make adjustments to get to EBITDA depending on the industry. But if you were given a company's IS and asked to pick the most important line item, you wouldn't find EBITDA since it's a non GAAP metric.

"Look, you're my best friend, so don't take this the wrong way. In twenty years, if you're still livin' here, comin' over to my house to watch the Patriots games, still workin' construction, I'll fuckin' kill you. That's not a threat, that's a fact.
 

Sorry to say, but Net Income would have literally been my last choice; a lot of shit can happen between EBIT and NI.

Just for reference to all the prospective monkeys, if asked this question for a Tech group, the correct answer is probably revenue growth.

“Millionaires don't use astrology, billionaires do”
 
Nouveau Richie:

Sorry to say, but Net Income would have literally been my last choice; a lot of shit can happen between EBIT and NI.

Just for reference to all the prospective monkeys, if asked this question for a Tech group, the correct answer is probably revenue growth.

Was just about to say this. Probably best to ask which industry this is for as a follow up question. If they don't specify I would go with EBIT.

"For I am a sinner in the hands of an angry God. Bloody Mary full of vodka, blessed are you among cocktails. Pray for me now and at the hour of my death, which I hope is soon. Amen."
 

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