The-definition.com

Definition

Times interest earned

Times interest earned provides an indication of the company’s ability to meet interest payments as they come due; computed by dividing income before interest expense and income taxes by interest expenses.

Times interest earned = income before Income Txes and Interest Expenses ÷ Interest Expense

Share it:  Cite

More from this Section

  • Materials price variance
    Materials price variance is the difference between the actual quantity times the actual ...
  • Grant Deed
    Grant Deed is a legally binding contract that transfers ownership of real estate from ...
  • Consolidated financial statements
    When a company owns more than 50% of the common stock of another company, it usually prepares ...
  • Nonoperating activities
    Nonoperating activities consist of various revenues and expenses and gains and losses ...
  • Notes receivables
    Notes receivables are claims for which formal instruments of credit are issued as proof ...