Finance and accounting
EBIT and operating profit
Profit from operations, before interest and tax.
Last reviewedWhat does EBIT and operating profit mean?
Operating profit is revenue minus COGS minus operating expenses, including depreciation and amortization. EBIT means earnings before interest and taxes and is often used to mean the same thing, although the two can differ when a company has one-off or non-operating items. Operating margin is operating profit divided by revenue.
Where does it come up in case interview prep?
Related terms
- EBITDAEarnings before interest, taxes, depreciation and amortization.
- Net incomeProfit after every cost, including interest and tax.
- Opex (operating expenses)Running costs that are not part of COGS.
- ProfitThe money left over after costs. Revenue minus cost.
- RevenueMoney earned from sales, before costs.
- CostWhat it takes to make and sell the product in a period.
- Fixed costA cost that stays the same when volume changes, within a normal range.
- Variable costA cost that rises and falls with how much you make.