Earnings before interest and taxes (EBIT) is a useful financial metric. Here's what investors need to know about it.

Operating income measures a company’s efficiency and performance and is the profit after operating expenses have been subtracted from gross profit. Before delving further into operating income ...

Once a company's EBIT is known, multiply that by the tax rate to calculate the total tax paid. Finally, to calculate operating cash flow, use the following equation: EBIT - tax paid + depreciation.

The simplest way to calculate interest expense is to multiply ... then its interest expense is $100 million multiplied by 0.05, or $5 million. EBIT stands for "earnings before interest and taxes." ...

Interest expenses and tax provisions subtracted from net income become the EBIT figure. Either method of calculation delivers the operating income figure that is divided by revenue to bring in the ...