EBIT is Earnings Before Interest and Taxes.  It is an indicator of a company's profitability.  It can be used to compare the profit of companies in different tax environments.

EBIT = Revenue - Operating Expenses (OPEX)


EBIT = Net Income + Interest + Taxes

EBIT is usually calculated from the bottom up.  A similar measure is Operating Earnings.

EBITDA is Earnings Before Interest, Taxes, Depreciation and Amortization.  It is a measure of a company's financial performance.  It is used in various Valuation Ratios

EBITDA = Net Profit + Interest + Taxes + Depreciation + Amortization

Enterprise value is the total cost to acquire the entire company.

Enterprise value = Market Cap + Preferred Equity + Non-Controlling interests + Total debt - Cash and equivalents

It's a better measure than Market Cap to use when trying to determine Value because it include things that must be taken on by a purchaser like debt.

Market capitaliztion is the total value of the company's equity.

Market Cap = Share price x Total outstanding shares

OIBDP is Operating Income Before Depreciation.  Similar to and can be used instead of EBITDA and/or Operating Earnings.  It differs from Operating Earnings by including Depreciation and Amortization.

OIBDP = Revenue - COGS - Selling, general and administration costs

Similar to EBIT.  Operating Earnings calculates the earnings of a company adjusting for it's capital structure.  It's a non-GAAP measure and can be calculate slightly different depending on your requirements.  But in general is:

Operating Earnings = Revenue - COGS - Selling, general and administration costs - Depreciation and Amortization

Growing up financially
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Growing up financially content is for educational purposes only and should not be used for investing real money. is not an investment adviser, brokerage firm, or investment company. Christopher Graham and are not professional money managers, accountants, or financial advisors. Any investment involves the taking of substantial risks, including but not limited to, complete loss of capital. Every investor has different strategies, risk tolerances, and time frames. Contact a professional certified financial advisor before making any financial decisions.
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