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Time Interest Earned Ratio Calculator

Calculate Time Interest Earned Ratio



Formula

The formula to calculate the Time Interest Earned Ratio (TIER) is:

TIER=EBITDAE

Where:

Definitions

Example

Let's say the total EBITDA is $50,000 and the total interest expense is $10,000. Using the formula:

TIER=5000010000

We get:

TIER=5

So, the time interest earned ratio is 5, meaning the company earns 5 times its interest expense.