. It should also be added that the EBIT measure is influenced philippine cellphone number code by the results of extraordinary events and financial income. This measure is widely used in financial analysis according to international standards in highly developed countries. Many other ratios and measures are constructed using it, even if only from the perspective of debt analysis.
When companies intend to calculate a given indicator, they give priority to answering a question about their real capabilities.
There is no single, compulsory EBIT calculation model. The freedom given to the entrepreneur in this matter is considered to be beneficial to him, primarily in terms of choosing the most advantageous formula from a value perspective. However, it is just as often illusory and can sometimes cause confusion, especially when the different recipients of the financial information use different calculation formulas.
Only by knowing the specifics of an entity's business activity, in particular the form and scope of its economic activities resulting in the repetition of certain groups of income, can the level of its basic profit, which is indicated precisely by the EBIT categories, be reliably determined. Therefore, before calculating these figures, the income of the entity in question must first be examined and only on the basis of this analysis can the basic profit be estimated.
On the other hand, by analysing only the financial situation, we cannot always know the particularities of a sector. In such a case, the safest solution is to use formulas for calculating EBIT based on the level of profit (loss) from sales, since the category of sales and income matched is usually the main category of income.
On the other hand, if the financial result is taken as the starting point for calculating EBIT
from operating activities - which is quite often the case in practice - this seems to be a less favourable solution, since other operating income is considered to be implicitly linked permanently to economic activity. In simpler terms, sales of non-financial fixed assets or grants are inherent to the business activity. This approach usually allows EBIT to take on higher values, but it may be artificially inflated above the entity's actual results, and financial projections and decisions made on its basis are subject to a greater risk of failure.