Operating income vs. EBIT – what is the difference?

Operating income and EBIT are profit categories that are very similar and they are commonly used as synonyms. However, there is a slight difference. Let’s see a typical income statement of a public company:



Amount (USD)

2Costs of goods sold (COGS)6.000.000
3 = 1 – 2Gross profit4.000.000
4Operating expenses (OPEX)1.500.000
5 = 3 – 4Operating profit2.500.000
6Financial income (interest income)300.000
7Financial expenses (interest expenses)200.000
8Other non – operating income15.000
9Other non – operating expenses12.000
10 = 5 + 6 – 7 + 8 – 9Profit before tax2.603.000
11Corporate income tax260.300
12 = 10 – 11Net Profit2.342.700


Operating profit includes only revenue made from operations of the company’s business (primarily sales). Sales are subtracted by costs of goods sold (COGS) and operating expenses (OPEX):

operating profit

How would you calculate EBIT (Earnings before interest and tax)?

You will use the following formula:


Both EBIT and Operating profit are used as measures of profit made in business operations. However, there is a slight difference, since EBIT includes interest income, other non–operating income, and other non–operating expenses. Therefore, in our example, operating profit is 2.500.000 USD, while EBIT is 2.803.000 USD.


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