Earnings Before Interest and Tax (EBIT) is a measure used to evaluate the profitability of a company. It shows how much profit a company makes after deducting the cost of its goods sold and operational expenses, such as salaries, rent, utilities, and depreciation, but before subtracting income tax and interest payments. EBIT is often referred to as ‘operating profit’ since it focuses solely on the company’s core income-generating operations rather than its financing activities. Knowing your company’s EBIT can give you a better understanding of its financial performance and help you make more informed decisions when it comes to managing costs.