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EBIT stands for earnings before interest and tax. It’s a company’s net income plus the amount paid on taxes and interest payments.
EBIT measures a company’s profitability without accounting for interest and tax payments. It’s also called operating income. By excluding interest payments, EBIT can hide costly debt. Similarly, EBIT hides tax inefficiency.
Related Links
Investopedia’s article on EBIT
Wikipedia's article EBIT
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