Financial Glossary - E

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EBIT
Earnings before interest and taxes, or operating profit

EBITDA
Earnings before interest, taxes, depreciation and amortization, or operating profit before depreciation and amortization = gross cash flow

EBITDA margin
EBITDA divided by revenues

Equity method
Valuation method used for the consolidation of investments between 20% and 50% in other companies

Equity ratio

Equity divided by total assets

EVA
Economic Value Added, or the difference between the return on capital employed and cost of capital; average capital employed x (ROCE – WACC)