EBT vs EBIT vs EBITDA

Tacettin İKİZ · March 30, 2025, 07:54:39 PM

EBT vs EBIT vs EBITDA
By Brian Feroldi

	Earnings Before Taxes (EBT)	Earnings Before Interest & Taxes (EBIT)	Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA)
Formula	Revenue - COGS - Operating Expenses - Other Expenses + Other Income	Revenue - COGS - Operating Expenses	Revenue - COGS - Operating Expenses + Depreciation + Amortization
Operational Insight	Insight into profitability before tax	View of operating profitability excluding financing costs	Rough measure of cash flow by adding back Depreciation and Amortization to EBIT
Distance from Net Income	Close to net income, excluding only taxes	Excludes effects of financing and taxes from operating profitability	Excludes effects of depreciation and amortization from EBIT
Uses and Applications	Analyzing profitability and tax strategy	Operating analysis, valuation, and company comparison	Valuation, investor analysis, and company comparison
Taxation and Financing	Highlights impact of taxation, not financing on total earnings	Ignores tax and financing impacts, focusing on operating earnings	Ignores impact of taxation, financing, depreciation, and amortization on operating earnings
Key Formulas	- Net Income = EBT - Taxes - Effective Tax Rate = (Taxes ÷ EBT) × 100	- Interest Coverage Ratio = EBIT ÷ Interest Expense - Return on Capital Employed = EBIT ÷ (Total Assets - Current Liabilities)	- EBITDA Margin = (EBITDA ÷ Revenue) × 100 - EV to EBITDA = Enterprise Value ÷ EBITDA

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