|Earnings before interest and taxes (EBIT)|
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Definition of Earnings before interest and taxes (EBIT)
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.
The operating profit before deducting interest, tax, depreciation and amortization.
An earningsbased measure that, for many, serves as a surrogate for cash flow. Actually consists of working
The use of various forms of gimmickry to distort a company's true financial performance in order to achieve a desired result.
A characterization used by the Securities and Exchange
earnings of a firm as reported on its income statement.
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.
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.
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.
Related: Benchmark interest rate.
This important ratio equals the net
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
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.
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
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
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.
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.
diluted earnings per share (EPS)
This measure of earnings per share
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 income tax (EBIT)
A measure of profit that
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
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
Equilibrium rate of interest
The interest rate that clears the market. Also called the market-clearing interest
Fixed Interest Rate
A rate that does not fluctuate with general market conditions.
Floating Interest Rate
A rate that fluctuates with general market condition.
Forward interest rate
interest rate fixed today on a loan to be made at some future date.
fractional interest discount
the combined discounts for lack of control and marketability. g the constant growth rate in cash flows or net income used in the ADF, Gordon model, or present value factor.
Fully diluted earnings per shares
earnings per share expressed as if all outstanding convertible securities
interest earned before taxes are deducted.
Guaranteed Interest Annuity (GIA)
interest bearing investment with fixed rate and term.
Guaranteed Interest Certificate (GIC)
interest bearing investment with fixed rate and term.
taxes paid by consumers when they buy goods and services. A sales tax is an example.
In England in the 1700's it was popular to bet on the date of death of certain prominent public figures. Anyone could buy life insurance on another's life, even without their consent. Unfortunately, some died before it was their time, dispatched prematurely in order that the life insurance proceeds could be collected. In 1774, English Parliament passed a law which restricted the right to be a beneficiary on a life insurance contract to those who would suffer an economic loss when the life insured died. The law also provided that a person has an unlimited insurable interest in his own life. It is still a legal stipulation that an insurance contract is not valid unless insurable interest exists at the time the policy is issued. Life Insurance companies will not, however, issue unlimited amounts of coverage to an individual. The amount of life insurance which will be approved has to approximate the loss caused by the death of the individual and must not result in a windfall for the beneficiary.
The price paid for borrowing money. It is expressed as a percentage rate over a period of time and
The cost of money, received on investments or paid on borrowings.
The cost of funds loaned to an entity. It can also refer to the equity ownership
A charge for the use of money supplied by a lender.
The cost of a loan or the compensation paid for the use of money. For example, you are paid interest for deposits you make into a savings account, and you pay interest for money that you borrow from a low-cost borrowing account.
Interest coverage ratio
The ratio of the earnings before interest and taxes to the annual interest expense. This
Interest coverage test
A debt limitation that prohibits the issuance of additional long-term debt if the issuer's
Interest equalization tax
Tax on foreign investment by residents of the U.S. which was abolished in 1974.
Numbers found in compound interest and annuity tables. Usually called the FVIF or PVIF.
Income that a company receives in the form of interest, usually as the result of keeping money in interest-bearing accounts at financial institutions and the lending of money to other companies.
Interest on interest
interest earned on reinvestment of each interest payment on money invested.
Interest-only strip (IO)
A security based solely on the interest payments form a pool of mortgages, Treasury
One of several investment accounts in which your premiums may be invested within your life insurance policy.
The amount of interest that is owed but has not been paid at the end of a period.
Contractual debt payments based on the coupon rate of interest and the principal amount.
Cost of using money, expressed as a rate per period of time, usually one year.
Rate charged or paid for the use of money, normally expressed as a percentage
Interest rate agreement
An agreement whereby one party, for an upfront premium, agrees to compensate the
Interest rate cap
Also called an interest rate ceiling, an interest rate agreement in which payments are made
Interest rate ceiling
Related: interest rate cap.
Interest Rate Differential
The interest rate on our financial assets minus the interest rate on a foreign country's financial assets.
Interest rate floor
An interest rate agreement in which payments are made when the reference rate falls
Interest Rate, Nominal
Payment for the use of borrowed funds, measured as a percentage per year of these funds.
Interest rate on debt
The firm's cost of debt capital.
interest rate parity
Theory that forward premium equals interest rate differential.
Interest Rate Parity
Theory that real interest rates are approximately the same across countries except for a risk premium.
Interest rate parity theorem
interest rate differential between two countries is equal to the difference
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