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If EBIT or EBITDA is presented as a performance measure, to which GAAP financial measure should it be reconciled?

April 26, 2017ebit ebitda financial GAAP measure PERFORMANCE presented reconciled

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If EBIT or EBITDA is presented as a performance measure, to which GAAP financial measure should it be reconciled?

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Answer 15: Because EBIT and EBITDA exclude recurring charges, companies should consider the answer to Question 8 if they intend to use EBIT or EBITDA as a performance measure. If a company is able to justify such use, EBIT or EBITDA should be reconciled to net income as presented in the statement of operations under GAAP. Operating income would not be considered the most directly comparable GAAP financial measure because EBIT and EBITDA make adjustments for items that are not included in operating income.