EBIT/Total Capital

EBIT/Total Capital is a measure of company’s profitability. It is calculated as EBIT divided by Total Capital.

This ratio shows what return expressed as EBIT company gets per dollar of Total Capital (sum of Shareholders’ Equity and Total Debt). This measure is similar to Return on Common Equity, but it may be more comprehensive since it takes onto account capital structure of a company.

Generally, the higher this ratio the better.

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