1. Finance
  2. Shareholder & Creditor Relations

Times Interest Earned Ratio


Measures a company's ability to meet its interest obligations from operations. A higher TIER suggests that the company is comfortably covering its interest expenses, reducing risk for lenders.


EBIT / Interest Expense


If a company has an EBIT of $300,000 and interest expenses of $100,000, the TIER would be 3 times.