Comparing the usefulness of two profit subtotals: Operating income and earnings before interest and taxes

Li Li Eng and Thanyaluk Vichitsarawong

Finance Research Letters, 2022, vol. 47, issue PA

Abstract: •Operating income is informative.•Earnings before income and tax (EBIT) is informative.•EBIT provides more explanatory power than net income.•Profit measures have more explanatory power in high corporate governance countries.•Profit measures have more predictive power in high corporate governance countries.

Keywords: Net income; Operating income; Earnings before interest and tax; Corporate governance (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321004943

DOI: 10.1016/j.frl.2021.102529

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