The EBIT ratio, or Earnings Before Interest and Taxes (EBIT) rate, is a profitability metric that measures a company’s ability to generate profits before taking into account any interest expense or taxes. It is calculated by dividing the company’s operating income (revenue less Operating Expenses) by its total sales revenue. This ratio helps investors to get an idea of how well a company is performing in comparison to other companies in its sector. The higher the EBIT ratio, the more profitable and successful the company is considered to be.