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

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  • Eng, Li Li
  • Vichitsarawong, Thanyaluk

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.

Suggested Citation

  • Eng, Li Li & Vichitsarawong, Thanyaluk, 2022. "Comparing the usefulness of two profit subtotals: Operating income and earnings before interest and taxes," Finance Research Letters, Elsevier, vol. 47(PA).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321004943
    DOI: 10.1016/j.frl.2021.102529
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    References listed on IDEAS

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