Formula
to calculate times interest earned:
Times
Interest Earned Ratio
= (net income + interest) / interest.
Times
interest earned definition and explanation:
The times
interest earned ratio indicates the extent of which
earnings are available to meet interest payments.
A lower times
interest earned ratio means less earnings are available
to meet interest payments and that the business is more
vulnerable to increases in interest rates.
The times interest earned ratio is included in the financial
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