How would I find the operating income on this income statement?
Is it the stated number: "INCOME BEFORE PROVISION FOR INCOME TAX: $13.8m" or would I use the EBIT formula:
EBIT = net income + interest + taxes = 10,701,000+ 6,150,000 + 3,147,000= 20,998,000
Here' a link to the SEC income statement if the picture doesn't show up.
@D-Stanley is right, because this is a financial institution income statement (which is formatted differently than one for a non-financial corporate), EBIT isn't really meaningful here. There are two other metrics that are somewhat comparable, but not fully apples-to-apples. You could try EBT (earnings before taxes), which in the income statement above is the line labeled "INCOME BEFORE PROVISION FOR INCOME TAXES", or alternatively, Pre-provision Income, which is essentially EBT plus Loan Loss Provision expense.
However, to answer your original question, let's look at IBM's 2022 10-K income statement. You could go bottom-up, but what you would find is some noise from Income from Discontinued Ops. on an after-tax basis. Given that EBIT is generally understood as a continuing ops. figure, your best bet would be just to go straight to "Income from continuing operations before income taxes" and then add back interest expense. Usually, it's even simpler than that, such as in the case of McCormick's 2022 10-K income statement, where you could just go straight to the "Operating Income" line for EBIT. Note that by doing this you exclude "Other Income, net", but that's generally the convention (so going bottom up is a bit messier than going straight to the Operating Income line).
