Difference between revisions of "Times interest earned ratio"
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| − | [[Times interest earned ratio]] is a debt management ratio indicating the degree of risk to lenders that a company will default on its interest payments. Also called [[interest coverage ratio]]. | + | [[Times interest earned ratio]] (or, simply, [[times interest earned]]; hereinafter, the ''Ratio'') is a debt management ratio indicating the degree of risk to lenders that a company will default on its interest payments. Also called [[interest coverage ratio]]. |
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According to [[College Accounting: A Practical Approach by Slater (13th edition)]], | According to [[College Accounting: A Practical Approach by Slater (13th edition)]], | ||
:[[Times interest earned ratio]]. A debt management ratio indicating the degree of risk to lenders that a company will default on its interest payments. Also called [[interest coverage ratio]]. | :[[Times interest earned ratio]]. A debt management ratio indicating the degree of risk to lenders that a company will default on its interest payments. Also called [[interest coverage ratio]]. | ||
| + | According to [[Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition)]], | ||
| + | :[[Interest coverage ratio]]. Also called the times interest-earned (TIE) ratio; determined by dividing [[operating income|earnings before interest and taxes]] by the interest expense. | ||
==Related concepts== | ==Related concepts== | ||
*[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]]. | *[[Accounting]] (alternatively known as [[accountancy]]) is management of [[financial data]], information, and knowledge about [[financial transaction]]s of [[legal entity|legal entiti]]es. [[Accountancy]] tends to include [[bookkeeping]] and, depending on a particilar enterprise, may also include [[quatitative analysis]] of [[financial data]] in the [[bookkeeping system]] and/or [[business intelligence]]. | ||
| − | ==Related | + | ==Related lectures== |
*[[Principles of Accounting]]. | *[[Principles of Accounting]]. | ||
| − | [[Category: Accounting]][[Category: Articles]] | + | [[Category: International Accounting]][[Category: Articles]] |
Latest revision as of 03:27, 9 November 2019
Times interest earned ratio (or, simply, times interest earned; hereinafter, the Ratio) is a debt management ratio indicating the degree of risk to lenders that a company will default on its interest payments. Also called interest coverage ratio.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Times interest earned ratio. A debt management ratio indicating the degree of risk to lenders that a company will default on its interest payments. Also called interest coverage ratio.
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Interest coverage ratio. Also called the times interest-earned (TIE) ratio; determined by dividing earnings before interest and taxes by the interest expense.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
