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 What is the two-step EBIT formula?
EBIT is computed in two passes, not one. First, gross to net: Gross revenue − Tax − Transaction fees = Net revenue — this is "what's actually your money" after VAT goes to the government and fees go to your acquirer. Second, net to EBIT: Net revenue − COGS − Variable costs − Fixed cost allocation = EBIT — "what's left after costs of doing business". The split is deliberate, and the lines below walk each pass.
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 How is net revenue calculated?
Take everything customers paid you (gross) and subtract two things that aren't yours to keep. Tax is the VAT collected on behalf of the government, computed as gross × tax_rate%, which you remit on schedule. Transaction fees are your acquirer's cut on card sales, computed as card_revenue × fee% and never applied to cash. What's left is net revenue — the money that actually entered your accessible bank.
- 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 How do I get from net revenue to EBIT?
From net revenue, subtract three more things. COGS is the cost of goods sold — per-unit COGS × units sold for product sales, or your typed COGS for manual entries. Variable costs are the day's entries on the Expenses tab — packaging, transport, repairs, spoilage, and the like. Fixed cost allocation is today's slice of your monthly or yearly fixed costs (rent, salaries, insurance). What's left is EBIT, the honest daily answer to "did today pay?".
- 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 Can I see the formula on a real day?
Yes — take a sample Tuesday: €840 gross (€240 cash, €600 card), 20% VAT, 2% card fee, €252 COGS, €40 variable costs, and a €345,66 fixed-cost slice. Run it through both passes and you get from €840 of gross down to €22,34 of EBIT in six subtractions. The table below traces every line so you can follow the money one step at a time.
Six subtractions from €840 of gross to €22,34 of EBIT. Each line is an honest cost of doing business.
05 Why is the formula split into two steps?
Because 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. Keeping the two passes distinct lets each number do its own job instead of collapsing both into one figure.
- 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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