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 statement ratio analysis spreadsheets highlighted in the left column, which provide formulas, definitions, calculation, charts and explanations of each ratio. 

The times interest earned ratio is listed in our profitability ratios.

 

The times interest earned ratio and other ratios are key to understanding financial statements. Our ratio calculation spreadsheets reduce time and effort in calculating decision making ratios. They reduce risk for lenders and investors and enable owners, managers and consultants to increase productivity and business profits. These spreadsheets are bargain priced to provide a huge return on investment. Click here for more details.

Spreadsheets to calculate ratios (includes formulas, definitions, explanations and charts):

See list of ratios , or the financial statement ratio analysis spreadsheets which are not highlighted in the left column, to see which other ratios our spreadsheets calculate, define and explain. 

Click here to order excel accounting spreadsheets to calculate from 8 to 150 business ratios with their formulas, definitions, calculations, charts and explanations. Each includes the times interest earned ratio.

The times interest earned ratio is included in our new spreadsheet which calculates 15 key business ratios, only $30 USD.

The times interest earned ratio may be included in our custom 1, 3 or 5 period financial statement ratio analysis spreadsheet.

Click here to order excel accounting spreadsheet to calculate 15 ratios  with formulas, definitions, calculations, charts, and explanations for each ratio.  (Includes Times Interest Earned Ratio).

Order free 3 ratio calculator spreadsheet. Current, quick and debt-to-equity ratios with formulas, calculations, charts and explanations. Email us at 3ratios@bizwiz.ca.