What is EBID?

EBID= EBIT (Earnings before Interest & Taxes) + Depreciation - Taxes

EBID stands for earnings before interest and depreciation. These are a post-tax measure of a company's operating performance. You can work out a company's EBID from its income statement.

Where have you heard about EBID?

You may have seen companies use EBID to show off their profitability. But you should be wary of using EBID as your main indicator. Instead, look at EBID alongside other factors such as capital expenditure, changes in working capital requirement, debt payments and exceptional items.

What you need to know about EBID.

EBID isn't regulated by Generally Accepted Accountancy Principles (GAAP) so what is included in the calculation varies. This is another reason why it's not the best formula for working out company profitability.