Investing for Beginners , investing

investingforbeginners.eu You can't operate a company by fear, because the way to eliminate fear is to avoid criticism. And the way to avoid criticism is to do nothing.
Steve Ross

    Investment Dictionary


    Browse by search:

    Browse by Letter: A B C D E F G H I J K L M N O P Q R S T U V W X Y Z All

    Times Interest Earned Ratio

     

    ‘Times interest earned ratio' compares ‘earnings before interest and taxes’ of the company to its interest expenses. Low ratio means that company may be in dangerous situation and its interest expenses are relatively high compared to company’s operating income. The normal ratio meaning depends on many factors as the sector of a company, stability, asset structure and other; however, if this ratio is lower than 1, such company might be at real risk and should be set under the deeper analysis. 

     

    Formula


    Times interest earned ratio = EBIT/ Interest expenses

     

    Basically, this ratio is no different from ‘interest coverage ratio’; another similar ratio is ‘cash coverage ratio’ where EBITDA instead of EBIT is used.

     

    Survey: Which stock market is the most attractive?

    Recommended Topics
    Investment psychology gains momentum in contemporary business world
    Balance Sheet

    Most Popular Articles
    Investing in Gold (I)
    Investing in Gold (II)
    Investing in Uncertain Period

     

    ARE YOU INTERESTED IN:

    EV/EBITDA Ratio

    Financial Analysis

    DCF Valuation


    BROWSE ON DICTIONARY:

    Beta

    P/E Ratio

    Dividends

    EBITDA Margin




    Last searches: market timing , planning , operating cash flow , pe ratio , intangible assets , Diversification , spot market , Leverage , non performing loan , fro , investing , investment , beginners , stocks