EBIT - Definition and Overview

EBIT stands for "Earnings before Interest and Taxes" (operating income). A professional investor contemplating a change to the capital structure of a firm (e.g., through a leveraged buyout) first evaluates a firm's fundamental earnings potential (reflected by EBITDA or EBIT), and then determines the optimal use of debt vs. equity.

See also

• EBITDA

External links

• operating income Definition (http://www.investorwords.com/3460/operating_income.html)