From gross profit to EBIT
In our KPI series we’re talking today about the terms of the profit and loss statement.
The breakdown is made as following:
+ Sales
– Cost of goods sold (COGS)
= Gross result / Contribution
– Operating expenses (Personnel, Research & Development, Marketing, Sales, Admin etc.)
= EBITDA (earnings before interest taxes and amortization)
– Depreciations
– Accruals
= EBIT (earnings before interest and taxes)
– Tax result
= NOPAT (net operating profit after taxes)
– Financial result
= Net Profit
This breakdown is the 1 x 1 for accountants and controllers. With these terms, comprehensive key figure systems can be developed.