Compare EBIT and operating income.

The major differences between EBIT and operating income are as follows −


  • It calculates company’s profitability.

  • It is used to understand the company’s profit making capacity.

  • It is not recognised by GAAP.

  • The adjustments are made.

  • The non-operated expenses are also considered.

  • It is not reported in financial statements.

Operating income

  • It calculates profit gained through operations.

  • It is used to know company’s capacity to convert their revenues into profit.

  • It is recognised by GAAP.

  • There is no need for adjustments.

  • Only operating expenses are considered.

  • It is reported in the financial statements.

Updated on: 27-Jul-2020


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