EV/EBIT is similar to EV/EBITDA but uses EBIT rather than EBITDA in the denominator. Because EBIT includes the cost of depreciation and amortization, EV/EBIT captures the ongoing cost of maintaining the company's asset base, producing a more conservative valuation multiple than EV/EBITDA. It is particularly useful for capital-intensive businesses where depreciation is a meaningful ongoing expense.
EV/EBIT = Enterprise Value / EBIT (TTM)
GeminIQ divides enterprise value by TTM EBIT from SEC filings. EBIT is taken from the filing directly or derived as Net Income + Income Tax + Interest Expense.
A: Use EV/EBIT for capital-intensive businesses where depreciation represents a real ongoing cost of maintaining the asset base (manufacturing, infrastructure, airlines). EV/EBITDA is more useful when comparing across companies with different depreciation policies or when D&A significantly exceeds actual maintenance capex.
A: EV/EBIT will always be higher than EV/EBITDA for the same company because EBIT is a smaller number than EBITDA. Typical ranges are 10-20x for most industries. Below 10x is value territory. Above 25x is expensive.
A: EBIT can differ based on whether the platform derives it from operating income or from net income + tax + interest. These can diverge when non-operating items are classified differently. GeminIQ derives EBIT from Net Income + Income Tax + Interest Expense when not directly reported.