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Earnings Before Interest After Taxes (EBIAT)

Earnings Before Interest After Taxes (EBIAT)

What is 'Earnings Before Interest After Taxes - EBIAT'

Earnings before interest after taxes (EBIAT) is a financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT, measures a company's profitability without taking into account the capital structure, like ratios such as debt to equity. EBIAT measures a company's ability to generate income from its operations for a specified time period.

Earnings Before Interest After Taxes Calculation and Example

The calculation for EBIAT is very straightforward. It is the company's EBIT x (1 - Tax rate). A company's EBIT is calculated in the following way:

Explaining 'Earnings Before Interest After Taxes - EBIAT'


Earnings Before Interest After Taxes (ebiat) FAQ

Are earnings before or after taxes?

Earnings mean after-tax net income, also known as the bottom line or a company's profits.

How do you calculate after tax EBIT?

Gross profits are used in calculating EBIT. Subtract operating costs from the gross profits. Business capital and tax liabilities are not included in earnings before interest and taxes, do not subtract them.

What is the difference between Nopat and Noplat?

NOPAT is similar to the after-tax operating profit and is a profitability measure that does not include tax benefits. The key difference is that NOPLAT includes changes in deferred taxes so that NOPAT is essentially NOPLAT without the deferred taxes.

What is Nopat used for?

Net operating profit after tax (NOPAT) is a financial measure that shows a company's performance through its main operations, net of taxes. Economic value added (EVA) calculations uses NOPAT and provides accurate operating efficiency for leveraged companies.

How is EBIT interest calculated?

The company's taxes paid, found in annual reports, or 10-K SEC filing is needed to calculate the interest expense with net income and EBIT. Interest and tax expense for the year is calculated by subtracting the company's net income from the EBIT.

What is a healthy Ebitda?

The enterprise value (EV) to the earnings before interest, taxes, depreciation, and amortization (EBITDA) ratio is different for industries. The average EV/EBITDA for the S&P 500 was 14.20. Generally, analysts and investors see an EV/EBITDA value below 10 as healthy and above average.

Is EBIT and Pbit the same?

Gross profit minus operating costs is operating profit, also known as profit before interest and tax (PBIT) or earnings before interest and tax (EBIT). Creditors use PBIT to measure a company's earning and paying capacity.

Further Reading

Direct investment, research intensity, and profitabilityDirect investment, research intensity, and profitability
www.jstor.org [PDF]
… The ratio of economic profits to economic assets gives the economic rate of profit. We start by assuming a firm in steady-state growth, with assets, knowledge, and earnings all growing at the … and the year-end stock, are the same for both before-tax and after-tax income, while the …

Pricing with performance-controlled multiplesPricing with performance-controlled multiples
link.springer.com [PDF]
… The ratio of economic profits to economic assets gives the economic rate of profit. We start by assuming a firm in steady-state growth, with assets, knowledge, and earnings all growing at the … and the year-end stock, are the same for both before-tax and after-tax income, while the …

Tests of the efficiency performance of conglomerate firmsTests of the efficiency performance of conglomerate firms
onlinelibrary.wiley.com [PDF]
… The ratio of economic profits to economic assets gives the economic rate of profit. We start by assuming a firm in steady-state growth, with assets, knowledge, and earnings all growing at the … and the year-end stock, are the same for both before-tax and after-tax income, while the …

Capital cash flows: a simple approach to valuing risky cash flowsCapital cash flows: a simple approach to valuing risky cash flows
www.jstor.org [PDF]
… The ratio of economic profits to economic assets gives the economic rate of profit. We start by assuming a firm in steady-state growth, with assets, knowledge, and earnings all growing at the … and the year-end stock, are the same for both before-tax and after-tax income, while the …

Corporate growth and risk around the worldCorporate growth and risk around the world
books.google.com [PDF]
… The ratio of economic profits to economic assets gives the economic rate of profit. We start by assuming a firm in steady-state growth, with assets, knowledge, and earnings all growing at the … and the year-end stock, are the same for both before-tax and after-tax income, while the …

Financial Evaluation of An Offshore Drilling Rig VentureFinancial Evaluation of An Offshore Drilling Rig Venture
www.onepetro.org [PDF]
… The ratio of economic profits to economic assets gives the economic rate of profit. We start by assuming a firm in steady-state growth, with assets, knowledge, and earnings all growing at the … and the year-end stock, are the same for both before-tax and after-tax income, while the …

Assessment of Firms' Financial Performances in Contemporary Economy: a Value-based ApproachAssessment of Firms' Financial Performances in Contemporary Economy: a Value-based Approach
papers.ssrn.com [PDF]
… The ratio of economic profits to economic assets gives the economic rate of profit. We start by assuming a firm in steady-state growth, with assets, knowledge, and earnings all growing at the … and the year-end stock, are the same for both before-tax and after-tax income, while the …


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