EBIT to Revenue
Calculate the EBIT per Revenue, which is the ratio of a company’s earnings before interest and taxes to its revenue, indicating how much profit a company generates from its operations before paying interest on debt and taxes on its earnings.
The EBIT to Revenue ratio measures the company’s ability to generate profit before financing costs and taxes relative to its revenue. EBIT is rebuilt from the bottom of the income statement (net income plus income tax expense plus interest expense), the same EBIT as in get_EBT_to_EBIT. It therefore includes non-operating income and expenses such as interest income, investment gains and other income, which is why it differs from the operating margin (get_operating_margin), which divides the reported operating income by revenue. A higher ratio indicates that a larger portion of the company’s revenue is converted into profit before interest and taxes.
The formula is as follows:
\[\text{EBIT to Revenue} = (\text{Net Income} + \text{Income Tax Expense} + \text{Interest Expense}) / \text{Revenue}\]Also known as: EBIT margin.
EBIT to Revenue in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_EBIT_to_revenue as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["LMT", "GD", "NOC"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_EBIT_to_revenue()
Or, after setting up the Finance Toolkit MCP, ask:
What were the EBIT margins of Lockheed Martin, General Dynamics and Northrop Grumman from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| GD | 0.1119 | 0.1123 | 0.1037 | 0.1034 | 0.1031 |
| LMT | 0.1211 | 0.1107 | 0.1334 | 0.1021 | 0.0938 |
| NOC | 0.2662 | 0.1733 | 0.0736 | 0.1374 | 0.1366 |
Parameters
get_EBIT_to_revenue accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of periods to sum flows (income and cash flow statement items) over, with balance sheet items averaged over the same number of period ends. E.g. 4 with quarterly data gives the trailing twelve months (TTM) and 3 with annual data a three-year cumulative figure. Defaults to None, which uses single-period flows (per quarter and not annualized with quarterly data). | 4 |