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EBIT Margin Calculator

Written by:
PK

Here is an EBIT margin calculator for computing earnings before interest expenses and tax margin. Enter the company's net earnings, interest expenses, and tax payments in the period, and total revenues to compute the EBIT margin.

EBIT Margin Calculator

What is the EBIT Margin?

The EBIT margin is a measure of a company's Earnings Before Interest and Taxes (or EBIT) as a percentage of its revenues. EBIT is a modified measure of earnings that adjusts for taxes and the company's choice of capitalization by normalizing interest.

EBIT, EBITA, and EBITDA (and their further variants) all arguably show a company's situation better – or, in the case of a turnaround, before – than using net profit margins. EBIT specifically is closer to operating income (and matches in companies without non-operating earnings), and company improvements show up there before the bottom line.

EBIT Margin Formula

The formula for EBIT margin is:

EBIT\ Margin=\frac{net\ income+interest\ expense+tax\ expense}{revenue}

Where:

  • Net Income: Net income from the income statement
  • Revenue: The company's top line sales
  • Tax Expense: The amount paid in taxes
  • Interest Expense: Amount the company paid to service its debt in the period

Margin Calculators

Now that you've seen EBIT margin, try some of the other margin calculators:

      

PK

PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK is in his mid-30s and works and lives in the Bay Area with his wife, two kids, and dog.

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