What is EBID?
EBID= EBIT (Earnings before Interest & Taxes) + Depreciation - Taxes
Key takeaways
EBID (earnings before interest and depreciation) is calculated as EBIT plus Depreciation minus Taxes and represents a post-tax measure of a company's operating performance from its income statement.
EBID is not regulated by Generally Accepted Accountancy Principles (GAAP), meaning what is included in the calculation varies, making it an unreliable standalone measure of company profitability.
Investors should be wary of using EBID as their main indicator and instead analyze it alongside capital expenditure, working capital changes, debt payments, and exceptional items.
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.