Earnings Before Interest & Tax (EBIT) Calculator Explained:
(a) What is this? This calculator provides a measure of profit in $ and % using EBIT.
(b) What does this tell me? The profit in both $ and %, note that this is BEFORE interest and tax are paid. It is a common measure of business profitability.
(c) Why should I use it? To see how much profit a business is making. This measure provides a profit number in both % and $. It has information regarding costs and income so you can see how the profit is created. Understand why the changes are occuring.
(d) Caution: Ensure GST/VAT is excluded. Use sales and costs for a month, a quarter, a half or an entire year - as long as all inputs are for the same time frames. The calculator doesn't indicate whether the EBIT is good or not. You will need to seek the advice of your accountant in regard to all financial matters. You use the calculator at your risk.