Earnings Before Interest and Taxes (EBIT) is an important metric used by businesses to measure the performance of their operations. It is calculated as total revenue minus total operating expenses, excluding any interest payments or taxes. This figure is seen as a better indicator of a venture’s financial health as it takes out non-operating items that could skew decision making. EBIT allows investors to gain a clearer picture of the underlying profitability of a business and assess its financial potential. Accordingly, it is one of the most closely watched metrics in the business world and can be used to compare businesses in the same sector.