Definition of Times Interest Earned Ratio The times interest earned ratio is an indicator of a corporation’s ability to meet the interest payments on its debt. The times interest earned ratio is calculated as
Times Interest Earned Ratio is a solvency ratio that evaluates the ability of a firm to repay its interest on the debt or the borrowing it has made. It is calculated as the ratio of EBIT (Earnings before Interest & Taxes) to Interest Expense. A higher ratio is favorable as it indicates...
Times Interest Earned A measure of a company's ability toservice its debts. It is calculated by dividing the company'searnings before interest and taxesby the totalinterest payableon its debts, expressed as a ratio.Investorspreferpublicly-traded companiesto have a middling times-interest-earned rat...
(redirected from Times-Interest-Earned) Times Interest Earned A measure of a company's ability to service its debts. It is calculated by dividing the company's earnings before interest and taxes by the total interest payable on its debts, expressed as a ratio. Investors prefer publicly-traded...
The Times Interest Earned ratio can be calculated by dividing a company’s earnings before interest and taxes (EBIT) by its periodic interest expense. The formula to calculate the ratio is: Where: Earnings Before Interest & Taxes (EBIT)– represents profit that the business has realized, without...
Times Interest Earned is the number of times our earnings (before interest and taxes) covers our interest expense. It represents our margin of safety in making fixed interest payments. A high ratio is desirable from both creditors and management. Times Interest Earned is calculated as foll...
The times interest earned ratio, sometimes called the interest coverage ratio, measures the proportionate amount of income that can be used to cover interest expenses in the future.
The times interest earned ratio is calculated by dividing a company's EBIT by the company's annual debt obligations. The Bottom Line The times interest earned ratio is a measurement of a company's solvency. A higher calculation is often better but high ratios may also be ...
Interest Coverage Ratio, also known as Times Interest Earned Ratio (TIE), states the number of times a company is capable of bearing its interest expense obligation from the operating profits earned during a period.Formula: Interest Cover = [Profit befor
The times interest earned (TIE) ratio is a measure of a company's ability to meet its debt obligations based on its current income.