What is the operating income (EBIT) for both firms?

Operating income is also called earnings before taxes and interest or EBIT. This measure reflects the profit a firm generates from ongoing operations, without taking any factors into consideration. Calculated by subtracting from the revenue total all of the expenses related to selling and administrative activities.

This is a useful metric for comparing the performances of similar companies. Additionally, investors may use this figure in combination with other data such as sales growth or return on equity when deciding whether or not a particular company’s stock should be included in their portfolio.

In the case of Firms A and B, they both appear to be performing well according to this metric given that their respective EBIT’s exceed zero which indicates profitability; however, Firm A appears to be more efficient at generating profits from its operations since it has a higher EBIT than Firm B – suggesting that it may have better cost management processes in place or perhaps more lucrative contracts with customers.

Even though Operating Income is not an exact measure of success, it can provide valuable information about how each business uses resources and achieves financial goals in comparison to the other.