EBIT Calculator

Your details

Top-down starts from revenue and subtracts expenses. Bottom-up starts from net income and adds back interest and tax.
Total net revenue or net sales for the period.
Direct costs of producing goods or services sold: materials, direct labor, manufacturing overhead.
Indirect operating costs: selling, general and administrative expenses, research and development, and depreciation and amortization.
Optional. Income from sources outside core operations (dividends received, gains on asset sales). Leave as 0 if not applicable.
Currency
EBITStrong operating profitability
$350,000

Earnings Before Interest and Taxes (operating profit)

Gross profit$600,000
EBIT margin35%
Gross margin60%
Gross profit$600,000
EBIT$350,000
35% %
Operating loss<0Low0-5Moderate5-10Healthy10-20Strong20+

EBIT is 35.0% of revenue - the business covers its operating costs.

  • A positive EBIT confirms the core business covers its operating costs and generates operating profit before financing decisions.
  • Your EBIT margin of 35.0% is above 20%, which is considered strong in most industries. It signals pricing power and cost discipline.
  • Gross profit is 60.0% of revenue, indicating your product economics are sound. Operating leverage depends on controlling fixed costs as revenue scales.

Next stepCompare your EBIT to last period and to industry peers. Investors and analysts often apply an EV/EBIT multiple (commonly 8x-15x for established companies) to estimate enterprise value.

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