how to do an eps/ebit analysis
By comparing the EBIT value at which both alternatives are equal, you can decide whether your expected returns will favor one plan or the other. 1  Calculate values for EPS based on a range of expected EBIT. The relationship between EPS and EBIT is: EPS = (EBIT - i) (1 - t) / n. The i parameter is the interest rate of the debt, the t parameter is the tax rate, and n is the number of equity shares.