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