Financial Accounting

Learn the toughest concepts covered in your Financial Accounting class with step-by-step video tutorials and practice problems.

Financial Statement Analysis

Ratios: Times Interest Earned (TIE)

Next Topic
1

concept

Ratios: Times Interest Earned (TIE)

clock
3m
Play a video:
Was this helpful ?
0
2
Problem

XYZ Company had Income from Operations of $320,000 and Net Income of $80,000. Interest Expense during the current period was $40,000 and Notes Payable totaled $400,000. What is the company’s Times Interest Earned?

3
Problem

ABC Company had Net Income during the period of $60,000 after Income Taxes of $40,000. Furthermore, the company had outstanding Notes Payable at the beginning and end of the year, respectively, of $250,000 and $350,000. If interest expense was $15,000 during the period, what is the company’s TIE ratio?