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Status New idea
Workspace Reckon Insights
Categories Visualisation
Created by Guest
Created on Jul 25, 2023

Times interest earned Ratio

Measures the proportionate amount of income that can be used to cover interest expenses in the future. The ratio therefore indicates a business's ability to cover debt obligations based on current income. Larger ratios are considered more favourable.

Formula
EBIT / Interest Expense

(EBIT = earnings before interest and taxes.)

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