• Refers to Earnings before Interest and Taxes.

 Embedded terms in definition
 Earnings before interest and taxes
 Referenced Terms
 Degree of financial leverage: Abbreviated DFL. The numerical measure of the firm's financial leverage. Measured at a base level of Ebit. Lowest value is 1. The higher the value of DFL the greater the risk, but also the greater the potential return if EBIT increases.

 Earnings before interest and taxes: Abbreviated Ebit. A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. In other words, operating and non-operating profit before the deduction of interest and income taxes.

 Financial break even points: The level of Ebit necessary just to cover all fixed financial costs; the level of EBIT for which EPS=$0.

 Related Terms
 Ebit eps approach

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