Measures the extent to which operating income can decline before the firm is unable to meet its annual interest costs. The TIE ratio is used by bankers to assess a firm's ability to pay their liabilities. TIE determines how many times during the year the company has earned the annual interest costs associated with servicing its debt. Normally, a banker will be looking for a TIE ratio to be 2. 0 or greater, showing that a business is earning the interest charges two or more times each year. A value of 1. 0 or less suggests that the firm is not earning sufficient amounts to cover interest charges.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). TIMES INTEREST EARNED (TIE). Retrieved September 23, 2026, from http://smartdefine.org/times_interest_earned_(tie)/definitions/1165250 |
| Chicago | Barry Goldsmith. 2010. "TIMES INTEREST EARNED (TIE)" http://smartdefine.org/times_interest_earned_(tie)/definitions/1165250 (accessed September 23, 2026). |
| Harvard | Barry Goldsmith 2010, TIMES INTEREST EARNED (TIE), Smart Define, viewed 23 September, 2026, <http://smartdefine.org/times_interest_earned_(tie)/definitions/1165250>. |
| MLA | Barry Goldsmith. "TIMES INTEREST EARNED (TIE)" 21 October 2010. Web. 23 September 2026. <http://smartdefine.org/times_interest_earned_(tie)/definitions/1165250> |