Understanding the EBIT formula is the single piece of knowledge that makes every other nouz screen click. Once you can trace a euro from "till total" to "today's number", every line in the P&L makes sense — and you can debug surprises in your numbers by walking down the formula.
01 The two-step formula
EBIT is computed in two passes, not one:
Gross revenue − Tax − Transaction fees = Net revenue
Net revenue − COGS − Variable costs − Fixed cost allocation = EBIT
The split is deliberate. Step one is "what's actually your money" (after VAT goes to the government and fees go to your acquirer). Step two is "what's left after costs of doing business".
02 Step one: net revenue
Take everything customers paid you (gross). Subtract two things that aren't yours to keep:
- Tax. VAT collected on behalf of the government — you remit it on schedule. Computed as
gross × tax_rate%. - Transaction fees. Your acquirer's cut on card sales. Computed as
card_revenue × fee%— never applied to cash.
What's left is net revenue — the money that actually entered your accessible bank.
03 Step two: EBIT
From net revenue, subtract three more things:
- COGS. Cost of goods sold — per-unit COGS × units sold for product sales, or your typed COGS for manual entries.
- Variable costs. The day's entries on the Expenses tab — packaging, transport, repairs, spoilage, etc.
- Fixed cost allocation. Today's slice of your monthly/yearly fixed costs (rent, salaries, insurance).
What's left is EBIT — earnings before interest and taxes. The honest daily answer to "did today pay?".
04 A worked example
Tuesday: €840 gross (€240 cash, €600 card). 20% VAT. 2% card fee. €252 COGS. €40 variable costs. €345,66 fixed-cost slice.
Six subtractions from €840 of gross to €22,34 of EBIT. Each line is an honest cost of doing business.
05 Why the formula is split in two
Net revenue and EBIT measure different things, and separating them makes both easier to reason about:
- Net revenue answers "how much of today's gross is actually mine to spend?". Useful for cash-flow reasoning.
- EBIT answers "did today pay?". Useful for daily profitability reasoning.
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