TTM EBIT

Category

Ratios

Units

Currency

Formula

TTM EBIT = TTM Net Income + TTM Income Tax Expense + TTM Interest Expense

Reference

Non-GAAP measure: Regulation G and Regulation S-K Item 10(e)

Source

Calculated by GeminIQ from figures reported in SEC filings

TTM EBIT is a company's earnings before interest and taxes over the trailing twelve months, the four most recent fiscal quarters. It measures the profit the business produced from its operations and other activities before paying lenders and tax authorities, on a current, full-year basis.

EBIT is not a US GAAP line item. When a company does not report it, EBIT is calculated from figures reported in SEC filings by adding income tax expense and interest expense back to net income.

GeminIQ uses EBIT reported in the filing where one exists, and otherwise derives it as net income plus income tax plus interest expense. The inputs are usually tagged NetIncomeLoss, IncomeTaxExpenseBenefit, and InterestExpense in XBRL. When a company presents EBIT itself, in an earnings release or a filing, it is a non-GAAP measure, and Regulation G and Regulation S-K Item 10(e) require it to be reconciled to the most directly comparable GAAP figure.

Each component is summed over four quarters. Income statements in 10-Q filings show the quarter and the year to date, and the fourth quarter is derived as the 10-K annual amount minus the nine-month amount from the third-quarter 10-Q. Because EBIT built up from net income includes everything below operating income except interest and tax, it picks up investment gains, equity-method earnings, and one-time items that operating income leaves out. Discontinued operations and noncontrolling interest can also flow in, depending on which net income line is used. That is why TTM EBIT and TTM operating income can differ noticeably for the same company.

TTM EBIT is the denominator of EV/EBIT, a valuation multiple that ignores capital structure, and the numerator of interest coverage, which measures how many times earnings cover interest. Taxed at the effective rate, it becomes TTM NOPAT, the numerator of return on invested capital. Using a trailing year keeps these ratios current with the latest quarterly filing.