Question

A times interest earned (TIE) ratio of 3.5 times means a firm has _____ that is(are) 3.5 times greater than the firm's interest expense.

Answer 1

EBIT

Step-by-step explanation:

TIE = EBIT/ Interest expense

So, TIE = EBIT/ Interest expense = 3.5 ⇒ EBIT = 3.5 * Interest expense