EBIT (Earnings Before Interest and Taxes) is also known as Operating Income, Operating Profit and related to Operating Margin. This represents total earnings of the Income Statement prior to paying taxes and interest on loans and Bonds.
Example: Suppose a company’s has the following Income Statement entries:
Sales = $100,000 (a.k.a. Top Line, Revenue, or Credit Sales)
Expenses = $41,000
Operating Income = $100,000 – $41,000 = $59,000 (a.k.a. Operating Profit)
The Operating Margin = Ratio = (Operating Income) ÷ (Top Line) = $59,000/$100,000 = 0.59 or 59%