EBIT · FVÖK

EBIT

Short definition

EBIT is earnings before interest and tax. Because it deducts D&A, it is a stricter operating measure than EBITDA and is largely independent of capital structure.

Detailed explanation

Many reports treat EBIT as operating profit; others park non-operating items, FX or equity-accounted results above or below that line. Before any peer comparison, check that “operating profit”, “EBIT” and “adjusted EBIT” describe the same economics.

EBIT is the bridge into ROIC and NOPAT: NOPAT ≈ EBIT × (1 − T), though cash tax may differ. Interest sits below EBIT, so a recapitalisation changes net income, not EBIT.

Why it matters for the CFO

Interest-cover covenants usually take EBIT or EBITDA in the numerator; the contract definition changes apparent capacity. FCFF is built from EBIT after tax, not from EBITDA; D&A is added back as a non-cash item while the tax shield is handled in the tax line or in WACC.

How it is calculated

FVÖK ≈ Faaliyet kârı (veya FAVÖK − Amortisman − İtfa)

EBIT = EBITDA − D&A. Under IAS 1 presentation, the operating-profit line may not equal EBIT.

Variables in the formula

• EBIT: Earnings before interest and tax
• EBITDA: EBITDA
• D&A: Depreciation and amortisation

How to read it

In capital-intensive businesses EBIT margin sits well below EBITDA margin; that gap is the accounting trace of asset consumption, not the cash capex itself. If FX and discounting swing EBIT, separate operating performance from finance and currency.

Numerical example

EBITDA 120 mn TL, D&A 40 mn TL → EBIT = 120 − 40 = 80 mn TL.

Definitions are educational. They are not investment, credit or tax advice.