companydata.dkOperating profit (EBIT)
Operating profit (EBIT — Earnings Before Interest and Taxes) is the result of a company's core operations, before financial items and tax. It shows whether the business itself makes money.
Operating profit is calculated as revenue (or gross profit) minus operating costs such as staff, administration, and depreciation — but before interest income, interest expenses, and tax. It is therefore unaffected by how the company is financed.
Why use operating profit?
Because financing costs and tax are excluded, operating profit is well suited for comparing earning power across companies. It feeds into key figures such as profit margin and return on assets.
Related terms
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is a company's result before interest, tax, depreciation, and write-downs — a measure of operating earnings before accounting and financial items affect the picture.
Profit margin (overskudsgrad)
The profit margin (overskudsgrad) shows how large a share of revenue ends up as operating profit. It is calculated as operating profit divided by net revenue, multiplied by 100.
Return on assets (afkastningsgrad)
Return on assets (afkastningsgrad) shows how much operating profit a company generates per krone tied up in assets. It is calculated as operating profit divided by the balance sheet total, multiplied by 100.
Net result (årets resultat)
The net result (årets resultat) is the bottom line of the financial statements: the company's total profit or loss for the fiscal year after all costs, financial items, and tax have been deducted.