Times Interest Earned Ratio Times interest earned ratio is a measure of the number of times the Earnings are in relation to the interest expenses of the company. The ratio helps in understanding the Company’s ability to repay its interest commitments. Interest expenses are the cost of Debt of the Company. Times Interest Earned Ratio = Earnings Before Interest and Tax Interest Expenses To Compute: Times Interest Earned Ratio

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Chapter 14, Problem 13F15

To determine

Concept Introduction:

Times Interest Earned Ratio

Times interest earned ratio is a measure of the number of times the Earnings are in relation to the interest expenses of the company. The ratio helps in understanding the Company’s ability to repay its interest commitments. Interest expenses are the cost of Debt of the Company.

Times Interest Earned Ratio =Earnings Before Interest and TaxInterest Expenses

To Compute:

Times Interest Earned Ratio

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