Once you’ve located the EBIT, the times interest earned ratio formula is: TIE Ratio: EBIT / Interest Expense EBIT represents all profits that the business has taken in for the accounting period in question, without factoring in any tax payments, interest, or other elements. Interest expense ...
interest earned ratio is 4.1, and the depreciation expense is $126,200. What is the value of the cash coverage ratio? A) 8.77 times B) 5.19 times C) 7.75 times D) 9.29 times E) 8.20 times Answer: D Explanation: EBIT = 4.1 × $24,300 = $99,630 Cash coverage ratio ...
I=interestP=principalr=ratet=timeI=interestP=principalr=ratet=time Interest earned according to this formula is called simple interest.The formula we use to calculate simple interest is I=PrtI=Prt. To use the simple interest formula we substitute in the values for variables that ...
The interest coverage ratio, or times interest earned (TIE) ratio, shows how well a company can pay the interest on its debts. It is calculated by dividing EBIT, EBITDA, or EBIAT by a period's interest expense. Interest coverage ratios vary greatly across industries. ...
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If a long-term note payable has a stated interest rate, that rate should be considered to be the effective rate. TRUE or FALSE. The times-interest-earned ratio always equals or exceeds the times-burden-covered ratio. True or False?
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times interest earnedratio. gross margin. total debt ratio. ASSET MANAGEMENT RATIOS a 16. Ratios that measurehow efficiently a firm usesits assetsto generatesalesare known as ___ ratios. assetmanagement long-term solvency short-term solvency profitability market value INVENTORY TURNOVER 17. The inv...
The formula used to calculate the payback period for qualifying projects is [{Blank}] . A) Ct = \sum (Cd + Ci) B) Ct = PP/Ba C) PP = \sum (Cd + Ci) D) PP = Ct/Ba E) Ba = Cd + Ci How do you find the times-interest-earned ratio in finance?
not receive interest payments, it still earns implicit interest.1 This happens because the bond price will move toward face value as it approaches maturity. When a bond is bought and sold without making interest payments, this price change is the spot interest rate earned by the bon...