What Is Operating Income (EBIT)? What Does Operating Income Tell Us?
Operating income or EBIT is the income available to a company out of revenue earned after cost of goods sold and operating expenses are deducted. This is also the income before taxes and interest expenses or incomes—hence the name EBIT or earnings before interest and tax.
For example, if a company earned $100 in revenue, but spent $60 to produce the goods sold and $30 on operating expenses, the operating income would be $10 ($100 - ($60 + $30) = $10).
Read more on investopedia here.
Published: 6/03/2021
