You might find that while doing analysis before investing into any company investor’s use Operating Profit and Earnings before Interest & Tax (EBIT) interchangeably. It is necessary to understand the concept of Operating Profit vs EBIT.

Is this correct? Ask yourself.

Many times Operating Profit is confused with EBIT.

Between the two, helps you in understanding as to which is a better and reliable metric for the valuation of a company.

So let us understand the two.