times interest earned

(redirected from Times Interest Earned Ratios)

Times Interest Earned

A measure of a company's ability to service its debts. It is calculated by dividing the company's earnings before interest and taxes by the total interest payable on its debts, expressed as a ratio. Investors prefer publicly-traded companies to have a middling times-interest-earned ratio. A low ratio indicates an inability to service debts, while too high a ratio indicates a lack of debt that investors may find undesirable.

times interest earned

times interest earned

see INTEREST COVER.
References in periodicals archive ?
AECI's 1997 financial performance provided solid debt service coverage and times interest earned ratios of 1.