Earnings before interest and taxes is positive above the operating break-even point, and a loss occurs below it.

Question

Quizplus · Accepted Answer

Earnings before interest and taxes (EBIT) is the amount of profit a business generates before paying interest and taxes. When EBIT is positive, it means the company is generating enough revenue to cover its operating expenses as well as interest expenses (if any). This point is called the operating break-even point. Below this point, the business is not generating enough revenue to cover its operating expenses, resulting in a loss.

Earnings Before Interest and Taxes Is Positive Above the Operating