Earnings before interest and taxes

The amount of profit realized from a business's own operations, but excluding operating expenses (such as cost of goods sold) and depreciation from gross income.

Also referred to as "operating profit" or "recurring profit".

Calculated as:

Investopedia Says:
Operating income would not include items such as investments in other firms, taxes or interest expenses. In addition, nonrecurring items such as cash paid for a lawsuit settlement are often not included.

Operating income is required to calculate operating margin, which describes a company's operating efficiency.

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Same as Net Operating Income.

Revenue less cost of goods sold and related operating expenses applying to the normal business activities of the entity. It excludes financial related items (i.e., interest income, dividend income, interest expense), extraordinary items, taxes, and other peripheral activities. See also Operating Loss.

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