This is a key figure in company valuation. It denotes the operating result or operating profit and corresponds to the net profit for the year before net interest payments (interests) and taxes. By eliminating these balance sheet items, EBIT allows a more objective comparison of operating profitability between companies and, in contrast to sales and earnings, provides a more accurate statement about the economic value of a company. In addition to pure earnings before interest and taxes, EBIT also represents the operating result before the financial result. Profit can still deviate considerably from this result if, for example, high income is generated from financing activities.
Source: Fuchs, W. (2021). Tourism, hotels and gastronomy from A to Z. Walter de Gruyter.