EBIT stands for earnings before interest and taxes and it is a measure of a company’s profitability, as it takes into account the earnings of a company beyond the effect of debt (which makes interests due) and taxation. Therefore, it serves to isolate the profitability part, at an operating level, not at the financial and taxation level (the ability of the company to optimize for debt and tax).

Financial statements help companies assess several aspects of the business, from profitability (income statement) to how assets are sourced (balance sheet), and cash inflows and outflows (cash flow statement). Financial statements are also mandatory for companies for tax purposes. They are also used by managers to assess the performance of the business.
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