What is Minimum Interest Coverage Ratio?

The interest coverage ratio (sometimes called times interest earned TIE) is a debt and profitability ratio used to determine how easily a company can pay interest on outstanding debt. The ratio is calculated by dividing a company’s earnings before interest and taxes by its interest expense.

Lenders use this formula to determine a company’s riskiness relative to its current debt or for future borrowing.

OTHER TERMS BEGINNING WITH "M"