Times Interest Earned Ratio Calculator

This calculator computes the Interest Coverage Ratio (TIE), which is a financial metric used to assess a company’s ability to cover its interest payments with its earnings before interest and taxes (EBIT). Follow these steps to use the calculator effectively:

EBIT (Earnings before interest and taxes):
Total Interest:

TIE Ratio:
  1. Enter EBIT (Earnings before Interest and Taxes): Input the company’s earnings before interest and taxes in the designated field.
  2. Enter Total Interest: Input the total interest expense incurred by the company.
  3. Calculate TIE Ratio: Click on the “Calculate TIE Ratio” button to compute the Interest Coverage Ratio.
  4. View Result: The calculated TIE Ratio will be displayed below the button.

Formula: The TIE Ratio is calculated using the formula:

TIE Ratio = EBIT / Total Interest

Example Calculation: For instance, if a company’s EBIT is $500,000 and its total interest expense is $100,000, the TIE Ratio would be:java

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TIE Ratio = 500,000 / 100,000 = 5

This means the company’s earnings before interest and taxes are sufficient to cover its interest payments 5 times over.

Feel free to input different values for EBIT and total interest to evaluate the company’s ability to meet its interest obligations.

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