Ebit Calculator

EBIT stands for "Earnings Before Interest and Taxes," and is calculated by subtracting a company's operating expenses from its revenue. The formula for EBIT is:

EBIT = Revenue - Operating Expenses

A good EBIT% depends on the industry, but in general, a higher EBIT% is considered more favorable as it indicates a company's ability to generate higher earnings relative to its revenue. However, what constitutes a good EBIT% can vary widely depending on factors such as the industry, company size, and stage of growth.

The EBIT ratio, also known as the EBIT coverage ratio, measures a company's ability to cover its interest expenses using its earnings before interest and taxes. The formula for the EBIT ratio is:

EBIT Ratio = EBIT / Interest Expense

A higher EBIT ratio is generally seen as positive as it indicates a company's ability to comfortably cover its interest expenses and avoid defaulting on its debt obligations. However, as with EBIT%, what constitutes a good EBIT ratio can vary widely depending on factors such as the industry, company size, and stage of growth, and should be evaluated in the context of a company's overall financial health and debt obligations.