#### Definition:

In finance, earnings before interest and taxes, is a measure of an company's benefit that precludes interest and income tax expenses. EBIT is the difference between working incomes and working liabilities.

#### Formula:

EBIT = R - E
###### Where,

R = Sales Revenue
E = Operating Expenses
#### Example :

A company has sales of $500000 with operating costs of $400000. Calculate the Earnings Before Interest and Taxes (EBIT).

##### Given :

Sales Revenue (R) = $500000
Operating Expenses (E) = $400000

##### To Find :

Earnings Before Interest and Taxes

##### Solution :

EBIT = R - E
= $500000 - $400000
= $100000