financial-metrics
EBIT is operating profit: earnings after all operating costs including depreciation and amortisation, but before finance costs and tax. It is the IFRS-friendly sibling of EBITDA and the starting point for ROIC.
IAS 1 requires a profit-or-loss statement but does not mandate a line labelled EBIT. In practice, European issuers present operating profit after OPEX and after depreciation of PPE and amortisation of intangibles. That subtotal is what most models call EBIT.
Unlike EBITDA, EBIT already charges the business for using long-lived assets. That makes it a better input to ROIC (via NOPAT) and to the classic interest coverage ratio.
EBIT = Revenue − Operating costs including D&A
or, from below:
EBIT = Net profit + Interest + Tax ± non-operating items that do not belong in operations
The last term is where files go wrong. Gains on property disposals, FX on financing, and investment income should not inflate “operating” EBIT if you are trying to value the core business.
Illustration only. Hypothetical distribution group.
| Line | Amount |
|---|---|
| Revenue | €80.0m |
| Cost of sales | €52.0m |
| Gross profit | €28.0m |
| Operating expenses (cash) | €16.5m |
| Depreciation & amortisation | €3.0m |
| EBIT | €8.5m |
| Add-back D&A → EBITDA | €11.5m |
Operating margin is 10.6%. EBITDA margin is 14.4%. If maintenance capex is €2.8m, EBIT is telling a closer story to economic profit than EBITDA is.
EBIT answers: after the accounting cost of assets already bought, does the operating engine earn a surplus? It does not answer whether those assets were a good use of capital — that is ROIC — or whether cash actually arrived — that is operating cash flow.
EBIT still depends on depreciation method, useful lives, and impairment. It is silent on capex timing, leases (presentation varies by standard and date), and one-off operating items. “Adjusted EBIT” in teasers should be reconciled to the statutory operating profit, not treated as a second set of books.
Dazur keeps statutory operating profit, D&A, and the EBITDA bridge in one structured record so quality of earnings work does not start from a screenshot of a teaser.