EBIT vs EBITDA
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Questions and Answers

Which of the following statements is true regarding EBIT and EBITDA?

  • EBIT does not deduct depreciation and amortization, while EBITDA does
  • EBIT and EBITDA are interchangeable terms
  • EBIT and EBITDA are both approved metrics under GAAP
  • EBIT includes non-cash expenses, while EBITDA includes only cash expenses (correct)

    • Which of the following accurately describes the use of EBIT and EBITDA in statutory reporting requirements?

  • EBIT and EBITDA are not approved metrics under GAAP and cannot be used for statutory reporting requirements (correct)
  • EBITDA is an approved metric under GAAP, while EBIT is not
  • EBIT and EBITDA can be used by public companies to fulfill statutory reporting requirements
  • EBIT is an approved metric under GAAP, while EBITDA is not

    • What expenses are deducted from net profit in EBIT?

  • Non-cash expenses related to assets (correct)
  • Depreciation and amortization expenses
  • Only cash expenses
  • No expenses are deducted

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