EBITDA vs. EBIT vs. EBT
Basis |
EBITDA |
EBIT |
EBT |
---|---|---|---|
Definition |
Profit excluding interest, taxes, depreciation, and amortization expenses. |
Profit excluding interest and tax expenses. |
Profit excluding tax expenses. |
Formula |
Revenue – COGS – Operating Expenses + Depreciation + Amortization |
Revenue – COGS – Operating Expenses |
Revenue – COGS – Operating Expenses – Other Expenses + Other Income |
Operational Insight |
A rough measure of profitability is calculated by adding back depreciation and amortization to EBIT. |
A measure of operating profitability excluding finance expenses. |
A look at profitability before taxes. |
Degree of Separation from Net Income/Profit |
Excludes finance, taxes, and capital depreciation from operating profits. |
Excludes the impact of finance and taxes on operating profitability. |
Closer to net income, excluding taxes. |
Uses and Applications |
Valuation, investor analysis, and company comparison, excluding financing and tax effects. |
Operational analysis, valuation, and corporate comparison. |
Examining profitability and tax approaches. |
Tax Impact |
Ignores the effect of taxes, financing, depreciation, and amortization on operating earnings. |
Ignores tax and finance implications in favor of operational earnings. |
Emphasizes the impact of taxes, not finance, on total earnings. |
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