Times Interest Earned Ratio (TIE) Calculator
This tool is used to calculate the company times interest earned ratio based on earnings before interest taxes and interest expenses instantly.
Formula To Calculate Times Interest Earned Ratio (TIE) :
TIE measures how easily a firm can pay its debts with its current income.
To calculate the Times Interest Earned Ratio(financial), use the following formula
Times Interest Earned = EBIT / Interest Expense
EBIT - Earnings before Interest and Taxes
Company XYZ has an EBIT of $4,000 and interest expense of $2,000.
Times Interest Earned = (4000/2000) = 2
Therefore, this company XYZ has a times interest earned of 2, meaning that Company XYZ income is 2 times greater than the annual interest expense.