|earnings before interest and income tax (EBIT)|
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Definition of earnings before interest and income tax (EBIT)
earnings before interest and income tax (EBIT)
A measure of profit that
Abusive Earnings Management
The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.
Abusive Earnings Management
A characterization used by the Securities and Exchange
earnings of a firm as reported on its income statement.
income that has been earned but not yet received. For instance, if you have a non-registered Guaranteed Investment Certificate (GIC), Mutual Fund or Segregated Equity Fund, growth accrues annually or semi-annually and is taxable annually even though the gain is only paid at maturity of your investment.
The accumulated coupon interest earned but not yet paid to the seller of a bond by the
The amount of interest accumulated on a debt security between
The amount of interest owing but not paid.
Accumulated Other Comprehensive Income
Cumulative gains or losses reported in shareholders'
Net income adjusted to exclude selected nonrecurring and noncash items of reserve, gain, expense, and loss.
Conventional earnings before interest, taxes, depreciation, and amortization (ebitDA) revised to exclude the effects of mainly nonrecurring items of revenue or gain and expense or loss.
Adjusted Income from Continuing
Operations Reported income from continuing operations
After-tax profit margin
The ratio of net income to net sales.
After-tax real rate of return
Money after-tax rate of return minus the inflation rate.
Amortizing interest rate swap
Swap in which the principal or national amount rises (falls) as interest rates
A situation wherein participants in a transaction have different net tax rates.
Average tax rate
taxes as a fraction of income; total taxes divided by total taxable income.
average tax rate
Total taxes owed divided by total income.
Base interest rate
Related: Benchmark interest rate.
basic earnings per share (EPS)
This important ratio equals the net
Basic Earnings Power Ratio
Percentage of earnings relative to total assets; indication of how
Before-tax profit margin
The ratio of net income before taxes to net sales.
Benchmark interest rate
Also called the base interest rate, it is the minimum interest rate investors will
The requirement that a claim holder voting against a plan of reorganization
Pretax income reported on the income statement.
Break-even tax rate
The tax rate at which a party to a prospective transaction is indifferent between entering
interest that is not immediately expensed, but rather is considered as an asset and is then
interest incurred during the construction period on monies invested in
Cash flow after interest and taxes
Net income plus depreciation.
Cash Flow–to–Income Ratio (CFI)
Adjusted cash flow provided by continuing operations
common-size income statement
income statement that presents items as a percentage of revenues.
interest paid on previously earned interest as well as on the principal.
interest paid on principal and on interest earned in previous
a method of determining interest in which interest that was earned in prior periods is added to the original investment so that, in each successive period, interest is earned on both principal and interest
interest earned on interest.
interest earned on an investment at periodic intervals and added to principal and previous interest earned. Each time new interest earned is calculated it is on a combined total of principal and previous interest earned. Essentially, interest is paid on top of interest.
A measure of earnings that includes only the results of the primary operating
Corporate tax view
The argument that double (corporate and individual) taxation of equity returns makes
Corporate taxable equivalent
Rate of return required on a par bond to produce the same after-tax yield to
Cost Plus Estimated Earnings in Excess of Billings
Revenue recognized to date under the percentage-of-completion method in excess of amounts billed. Also known as unbilled accounts
Covered interest arbitrage
A portfolio manager invests dollars in an instrument denominated in a foreign
Current Income Tax Expense
That portion of the total income tax provision that is based on
Current Tax Payment Act of 1943
A federal Act requiring employers to withhold income taxes from employee pay.
Daily Interest Accumulation
Account in which interest is accrued daily and credited to the account at the end of a specified time.
One side of a journal entry, usually depicted as the left side.
Funds which have been deducted from your account. The opposite of a debit is a credit.
A card which enables you to directly access your bank account when paying for purchases. So instead of paying in cash or with a credit card, a debit card allows the specified amount of the purchase to be electronically debited, or withdrawn, from your bank account. See Interac Direct Payment for an explanation of the actual procedures that you follow at the point of sale (POS) terminal to use your debit card.
A record of the funds which have been debited from your account.
Deferred Income Tax Expense
That portion of the total income tax provision that is the result
Deferred Tax Asset
Future tax benefit that results from (1) the origination of a temporary difference
Deferred Tax Liability
Future tax obligation that results from the origination of a temporary
A non-cash expense that provides a source of free cash flow. Amount allocated during the
A measure of ebitDA that is outlined or defined in a debt or credit agreement.
Depreciation tax shield
The value of the tax write-off on depreciation of plant and equipment.
depreciation tax shield
Reduction in taxes attributable to the depreciation allowance.
diluted earnings per share (EPS)
This measure of earnings per share
income less income tax.
income that a company receives in the form of dividends on stock in other companies that it holds.
Agreement between two countries that taxes paid abroad can be offset against
Earned income is generally an individual's salary or wages from employment. It also includes some taxable benefits. Earned income also includes business income if the individual is self-employed. Earned income is used as the basis for calculating RRSP maximum contribution limits.
Net income for the company during the period.
In general, refers to a company's total sales less cost of sales and operating expenses, including interest and income tax.
Earnings before interest and taxes (EBIT)
A financial measure defined as revenues less cost of goods sold
Earnings before interest and taxes (EBIT)
The operating profit before deducting interest and tax.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
The operating profit before deducting interest, tax, depreciation and amortization.
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working
The active manipulation of earnings toward a predetermined target.
Earnings per Share
A measure of the earnings generated by a company on a per
Earnings per share (EPS)
EPS, as it is called, is a company's profit divided by its number of outstanding
earnings per share (EPS)
See basic earnings per share and diluted earnings per share.
Earnings per share of common stock
How much profit a company made on each share of common stock this year.
Earnings retention ratio
Positive or negative differences from the consensus forecast of earnings by institutions
The ratio of earnings per share after allowing for tax and interest payments on fixed interest
EBBS - Earnings before the bad stuff
An acronym attributed to a member of the Securities and
EBDDT - Earnings before depreciation and deferred taxes
This measure is used principally by
earnings before interest and taxes. The measure often is used to gauge coverage of fixed charges.
Abbreviation for earnings before interest and taxes.
earnings before interest, taxes, and amortization expense.
earnings before interest, taxes, depreciation, and amortization.
ebitDA divided by total sales or total revenue.
earnings before interest, taxes, deprecation, amortization, and rents.
The real flow of cash that a firm could pay out forever in the absence of any change in
Cash flow plus change in present value.
Effective annual interest rate
An annual measure of the time value of money that fully reflects the effects of
effective annual interest rate
interest rate that is annualized using compound interest.
Effective Interest Rate
The rate of interest actually earned on an investment. It is
Effective Tax Rate
The total tax provision divided by pretax book income from continuing
Electronic Federal Tax Payment Systems (EFTPS)
An electronic funds transfer system used by businesses to remit taxes to the government.
Employee Retirement Income Security Act of 1974 (ERISA)
A federal Act that sets minimum operational and funding standards for employee benefit
Equilibrium rate of interest
The interest rate that clears the market. Also called the market-clearing interest
Equivalent taxable yield
The yield that must be offered on a taxable bond issue to give the same after-tax
Federal Unemployment Tax Act (FUTA)
A federal Act requiring employers to pay a tax on the wages paid to their employees, which is then used to create a
Also called a busted convertible, a convertible security that is trading like a straight
Assets that pay a fixed-dollar amount, such as bonds and preferred stock.
The market for trading bonds and preferred stock.
A security that pays a specified cash flow over a
Fixed Interest Rate
A rate that does not fluctuate with general market conditions.
Floating Interest Rate
A rate that fluctuates with general market condition.
Foreign tax credit
Home country credit against domestic income tax for foreign taxes paid on foreign
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