should nonoperating rev/exp include in EBIT?

should nonoperating rev/exp include in EBIT?

yes. it includes all income/expense from continuing operations (ofc doesnt include interest and income taxes expense :slight_smile: )

Hmm… that’s kind of confusing considering EBIT is Operating Income, so you would think only operating exp goes into the calculation.

if you get rent from lands you own, it gets added to operating income to result in EBIT.

Thanks… kinda confusing that nonoperating expense goes into operating income. But just include it!

Depends what you are calling Non-operating but revenue/expenes are most likely interest income/interest expense . That is not included in EBIT (hence the I)

Simply stated:


-Less Cogs

= Gross Profit



= Operating income (EBIT)

  • interest expense
  • interest income


  • taxes

= Net income

I’m not sure that is true if renting land is not considered apart of normal operations (if you sell shoes and rent part of you warehouse to a bike manufacture) this should fall below OI…

Someone please correct me if I am wrong!

All rent should be part of operating expenses.

Exception is if the rent it’s categorised as a capital (finance) lease in which case an asset and liability gets created. The lease paymets get recognised as interest expense on the lease liability and a depreciation expense is recognised on the lease asset.

I don’t think so. Have a look at a sample income statement. EBIT would also include gains/losse and other non opreating items.