21 December 2012
Earnings Before Interest and Taxes. A measure of a company's earning power from ongoing operations, equal to earnings before deduction of interest payments and income taxes. EBIT excludes income and expenditure from unusual, non-recurring or discontinued activities. In the case of a company with minimal depreciation and amortization activities, EBIT is watched closely by creditors, since it represents the amount of cash that such a company will be able to use to pay off creditors. also called operating profit. Break even EBIT = VC+FC = 42+6 = 48 Therefore at Income level of Rs 48/- EBIT of the firm will be equal to zero
21 December 2012
Earnings Before Interest and Taxes. A measure of a company's earning power from ongoing operations, equal to earnings before deduction of interest payments and income taxes. EBIT excludes income and expenditure from unusual, non-recurring or discontinued activities. In the case of a company with minimal depreciation and amortization activities, EBIT is watched closely by creditors, since it represents the amount of cash that such a company will be able to use to pay off creditors. also called operating profit. Break even EBIT = VC+FC = 42+6 = 48 Therefore at Income level of Rs 48/- EBIT of the firm will be equal to zero
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