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A metric used to measure a company's ability to meet its debt obligations. It is calculated by taking a company's earnings before interest and taxes (EBIT) and dividing it by the total interest payable on bonds and other contractual debt. It is usually quoted as a ratio and indicates how many times a company can cover its interest charges on a pretax basis. Failing to meet these obligations could force a company into bankruptcy.
Also referred to as "interest coverage ratio" and "fixed-charged coverage."
Investopedia explains 'Times Interest Earned - TIE'
Ensuring interest payments to debt holders and preventing bankruptcy depends mainly on a company's ability to sustain earnings. However, a high ratio can indicate that a company has an undesirable lack of debt or is paying down too much debt with earnings that could be used for other projects. The rationale is that a company would yield greater returns by investing its earnings into other projects and borrowing at a lower cost of capital than what it is currently paying to meet its debt obligations.
What else can I help you with?
How do you calculate simple interest earned?
simple interest = principle (money) times the rate times the time
How do you calculate times interest earned if there was no interest expense?
Well that is easy there is none and there is no way you can do that
If the principal is 350 and the interest rate is 3 percent what is the simple interest earned in one year simple interest P and times r and times t?
I
Is interest earned calculated by multiplying the principle times the opportunity cost?
No.
Zane has 4 times more money invested at 9 percent than another bank where 6 percent is earned for the year if Zane earned 5040 in interest for the year. how much does Zane have invested at 9 percent?
Sorry I really don't know.
How do you calculate simple interest earned?
simple interest = principle (money) times the rate times the time
How do you calculate times interest earned if there was no interest expense?
Well that is easy there is none and there is no way you can do that
The number of times interest charges are earned is computed as?
Type y income before income tax plus interest expense, divided by interest expense our answer here...
How does one calculate times interest earned?
A times interest earned is calculated to determine how well a business could pay off its debts. It is calculated by taking the company's earnings before taxes and interest and dividing it by the interest on bonds payable and other debt.
What is the formula for times interest earned ratio?
Times Interest Earned = Operating Income/ Interest Expense.
A company's fixed interest expense is 8000 its income before interest expense and income taxes is 32000 Its net income is 9600 The company's times interest earned ratio is?
Formula for times interest earned = earning before interest and tax / interest expense Times interest earned = 32000 / 8000 = 4 times
Eric earns 6.5 simple interest annually on his savings account. He has a beginning balance of 459.32. How much interest does he receive?
To calculate the simple interest earned by Eric, you can use the formula for simple interest: ( \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} ). In this case, with a principal of $459.32, an annual interest rate of 6.5% (or 0.065), and assuming the time is 1 year, the interest earned would be ( 459.32 \times 0.065 \times 1 = 29.93 ). Therefore, Eric receives approximately $29.93 in interest for one year.
When Taffy has a savings account with National Bank She earns 4.5 percent annual simple interest on 1239.12 How much will her money earn in interest in one year?
To calculate the interest earned in one year, use the formula for simple interest: ( \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} ). Here, the principal is $1239.12, the rate is 4.5% (or 0.045), and the time is 1 year. Thus, the interest earned will be ( 1239.12 \times 0.045 \times 1 = 55.76 ). Taffy will earn $55.76 in interest in one year.
If a firm has both interest expense and lease payments would times interest earned be smaller than fixed charge coverage?
times interest earned be smaller than fixed charge coverage
Calculate the simple interest you would receive in five years on a savings account that earns 7.5 annual interest. What if your beginning balance is 1236.59.?
To calculate simple interest, use the formula: ( \text{Interest} = P \times r \times t ), where ( P ) is the principal amount, ( r ) is the annual interest rate (in decimal), and ( t ) is the time in years. For a beginning balance of $1236.59 at an annual interest rate of 7.5% (or 0.075), the interest earned in five years would be: [ \text{Interest} = 1236.59 \times 0.075 \times 5 = 462.21. ] Thus, you would receive $462.21 in interest after five years.
Is a high times interest earned ratio considered good?
Yes, a high times interest earned ratio is considered good because it indicates that a company is generating enough earnings to cover its interest expenses.
How can you calculate simple interest principle rate and time?
To calculate simple interest, you can use the formula: ( I = P \times r \times t ), where ( I ) is the interest earned, ( P ) is the principal amount, ( r ) is the annual interest rate (expressed as a decimal), and ( t ) is the time in years. To find any of the variables, you can rearrange the formula accordingly: ( P = \frac{I}{r \times t} ), ( r = \frac{I}{P \times t} ), or ( t = \frac{I}{P \times r} ). Ensure that the time period matches the interest rate's time frame for accurate calculations.
