How to calculate EBIT ( Earnings before interest and taxes) from financial data?

At North Data, we display key financial figures such as "Net Income/Loss" from annual financial statements. These are shown as earnings in graphs and tables. From this data, EBIT (Earnings Before Interest and Taxes) might be calculated.

Please note that this depends on the availability of a company's specific financial figures. In some cases, only an approximate calculation is possible due to the available data.

EBIT is a central metric for a company's operational profitability, as it excludes interest and tax effects. Depending on available financial data, EBIT can be calculated in different ways. For example:

1. Starting from Net Income

EBIT can be calculated starting from net income by adding back interest and taxes:

EBIT = Net Income + Interest + Taxes

• Net Income: The profit after all expenses, including interest and taxes.

• Interest: Expenses related to borrowing.

• Taxes: Corporate income taxes.

2. Starting from Revenue

EBIT can be calculated starting from revenue:

EBIT = Revenue - Operating Expenses - COGS (Cost of Goods Sold)

Where:

• Revenue: The total income generated by the company.

• COGS: This can be approximated using the "Cost of Materials" and "Wages and Salaries" (if these are production-related costs).

• Operating Expenses: Include all non-production costs such as marketing, rent, and administrative expenses. If detailed breakdowns are unavailable, you may need to estimate based on industry standards or other financial data.

Additional Note on EBITDA

In some cases, the income statement also includes EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This metric can be extracted directly from the publication if needed.

EBITDA = EBIT + Depreciation + Amortization