Which of the following is another ofEBIT(earning before interest and taxes)?a)Operating profitb)Gross Profitc)Net Profitd)NoneCorrect answer is option 'A'. Can you explain this answer?

Question

Answer

EBIT (earnings before interest and taxes) is a company's net income before income tax expense and interest expenses have been deducted. EBIT is used to analyze the performance of a company's core operations without the costs of the capital structure and tax expenses impacting profit.

Answer

EBIT stands for Earnings Before Interest and Taxes. It is a financial metric that calculates a company's profitability by subtracting its operating expenses from its revenue. EBIT is an important metric for investors and analysts because it provides an indication of a company's ability to generate income from its core operations.

One of the other names for EBIT is Operating Profit. It represents the profit a company generates from its core operations before deducting interest and taxes. Operating profit is calculated by subtracting operating expenses from revenue.

Some examples of operating expenses include:

- Cost of Goods Sold (COGS)
- Selling, General, and Administrative (SG&A) expenses
- Research and Development (R&D) expenses

Therefore, the correct answer to the given question is option 'A', Operating Profit. Gross Profit, on the other hand, is the revenue earned by a company minus the cost of goods sold. Net Profit is the profit a company generates after deducting all expenses, including interest and taxes, from its revenue.

Answer

D

Answer

Option a) Operating profit is the right answer..

EBIT or earnings before interest and taxes, also called operating income, is a profitability measurement that calculates the operating profits of a company by subtracting the cost of goods sold and operating expenses from total revenues. This calculation shows how much profit a company generates from its operations alone without regard to interest or taxes. That’s why many people refer to this calculation as operating earnings or operating profit.

Answer

Sales
less cost of goods sold
we get Gross profit

gross profit
less operating expenses like administrative, selling and distribution,
we get operating profit(EBIT)

less interest
we get EBT

LESS TAX

WE GET EAT

Answer

A

Answer

A

Answer

Net profit

Top Courses for CommerceView all

Economics Class 12

Business Studies (BST) Class 12

Economics Class 11

Business Studies (BST) Class 11

Accountancy Class 12

Top Courses for Commerce

Top Courses for Commerce

Related Content

Commerce Courses

Other Courses

How To Prepare?

Related Exams

Company