EBIT formula
\[ \text{Operating Profit} + \text{Other income and expenses, net} \]
Defined directly from the income statement rather than as net profit plus interest and tax, so it can be computed even where the tax line is missing.
Terms
- Operating Profit, period total: What the core business earns: revenue minus the cost of what was sold and the cost of running the company, before financial items, other income and tax.
- Other income and expenses, net, period total: Income and expenses outside the main operations, net: interest and investment income, currency gains and losses, gains and losses on disposals.
Result
EBIT is an amount in currency. Higher is better.
Target
There is no general target; compare with the company’s own history and with peers in the same industry.
EBIT pitfalls
- Sources differ on whether one-off gains, currency results and interest income belong in EBIT. Here they do; state your choice whenever EBIT is compared across companies.
EBIT in Business Central
Cost of sales (period total)
- Category Cost of Goods Sold (26) and every category below it
- Plus 3 accounts assigned directly: 50310 Project Costs, 50320 Project Cost Applied, 50410 Purchase Variance, Retail
10 posting accounts in total.
The full account list is on the Cost of sales page.
Operating expenses (period total)
- Category Expense (31) and every category below it
- Plus 3 accounts assigned directly: 60410 Utilities Expense - Power Plant, 66200 Depreciation, Equipment, 67400 Miscellaneous
- Except category Interest Expense, account 91000 Currency Losses
102 posting accounts in total.
The full account list is on the Operating expenses page.
Other income and expenses, net (period total)
- Category Income, Interest (24) and every category below it
- Plus 6 accounts assigned directly: 40310 Income from securities, 40320 Management Fee Revenue, 40380 Currency Gains, 40390 Other Incidental Revenue, 81200 Gains and Losses, 91000 Currency Losses
7 posting accounts in total.
The full account list is on the Other income and expenses, net page.
Revenue (period total)
- Category Income, Services (19) and every category below it
- Category Income, Product Sales (20) and every category below it
- Category Income, Jobs (21) and every category below it
- Category Sales Discounts (22) and every category below it
- Category Sales Returns & Allowances (23) and every category below it
- Category Job Sales Contra (25) and every category below it
- Plus 8 accounts assigned directly: 40410 Job Sales, 40420 Job Sales Applied, 40430 Sales of Service Contracts, 40440 Sales of Service Work, 40910 Discounts and Allowances, 40920 Invoice Rounding, 40930 Payment Tolerance, 40940 Sales Returns
13 posting accounts in total.
The full account list is on the Revenue page.
Add EBIT to a Power BI report
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