Earnings before interest and taxes are positive above the operating breakeven point, and a loss occurs below it.

Question

Quizplus · Accepted Answer

This is true. Earnings before interest and taxes (EBIT) refer to a company's profit after deducting all operating expenses except for interest and income tax expenses. The operating breakeven point is the level of operations at which a company's revenues and expenses are equal, resulting in zero income. Therefore, EBIT will only be positive above this point and will result in a loss below it.

Earnings Before Interest and Taxes Are Positive Above the Operating