EBIT shows how profitable the core business is regardless of how it is financed or taxed – useful for comparing companies with different debt levels.
How to use the EBIT Calculator
- Calculate from
- Revenue
- Cost of goods sold
- Operating expenses (incl. depreciation)
- Net income
- Interest expense
- Income taxes
Results update as you type, and every field accepts the units shown in its menu.
How it works
Choose the method and enter the figures.
Tips
- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.
Common mistakes to avoid
- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.
Inputs explained
| Field | What to enter |
|---|---|
| Calculate from | Choose one: Revenue and expenses, Net income |
| Revenue | Amount in your currency |
| Cost of goods sold | Amount in your currency |
| Operating expenses (incl. depreciation) | Amount in your currency |
| Net income | Amount in your currency |
| Interest expense | Amount in your currency |
| Income taxes | Amount in your currency |
Example values
How the main result changes when Revenue changes and everything else stays at the example values above:
| Revenue | EBIT (operating profit) |
|---|---|
| 500,000 | -300,000 |
| 750,000 | -50,000 |
| 1,000,000 | 200,000 |
| 1,250,000 | 450,000 |
| 1,500,000 | 700,000 |
| 2,000,000 | 1,200,000 |
Formula
EBIT = revenue − COGS − operating expenses (incl. depreciation)or EBIT = net income + interest + taxesEBIT margin = EBIT ÷ revenueWorked example
Inputs — Calculate from: Revenue and expenses; Revenue: $1,000,000; Cost of goods sold: $550,000; Operating expenses (incl. depreciation): $250,000; Net income: $150,000; Interest expense: $30,000; Income taxes: $40,000.
Results — EBIT (operating profit) = $200,000.00; EBIT margin = 20 %.
Frequently asked questions
What is EBIT?
Earnings before interest and taxes – operating profit.
Is EBIT the same as operating income?
Usually, unless there are significant non-operating items.
What is a good EBIT margin?
It depends on the industry; 10–20% is solid for many businesses.
What formula does the EBIT Calculator use?
EBIT = revenue − COGS − operating expenses (incl. depreciation).