{"id":37241,"date":"2024-06-18T07:42:12","date_gmt":"2024-06-18T07:42:12","guid":{"rendered":"https:\/\/www.greatassignmenthelp.com\/questions\/?p=37241"},"modified":"2024-06-18T07:42:12","modified_gmt":"2024-06-18T07:42:12","slug":"true-or-false-the-times-interest-earned-ratio-is-calculated-as-ebit-divided-by-interest-expense","status":"publish","type":"post","link":"https:\/\/www.greatassignmenthelp.com\/questions\/true-or-false-the-times-interest-earned-ratio-is-calculated-as-ebit-divided-by-interest-expense\/","title":{"rendered":"True or False: The times-interest-earned ratio is calculated as EBIT divided by interest expense."},"content":{"rendered":"<p data-pm-slice=\"1 1 []\"><strong>Question:-<\/strong> True or False: The times-interest-earned ratio is calculated as EBIT divided by interest expense.<\/p>\n<p><strong><span style=\"font-family: Times New Roman, serif;\"><span style=\"font-size: medium;\">Answer: True.<\/span><\/span><\/strong><\/p>\n<p><span style=\"font-family: Times New Roman, serif;\"><span style=\"font-size: medium;\">The times&#8217; interest earned is another financial ratio that is used in assessing a company\u2019s ability to pay for the interest on a particular debt from the operating income. This depends on the formula of EBIT\/Interest expense, where the EBIT is the earnings before interest and taxes and the interest expense is the interest line on the company\u2019s income statement of a given period.<\/span><\/span><\/p>\n<p><span style=\"font-family: Times New Roman, serif;\"><span style=\"font-size: medium;\">A higher times-interest-earned ratio also gives the inside the fact that the firm is in a position to handle interest responsibility from operating income without a lot of struggle. Conversely, the low percentage means that the company can face some issues with regard to the servicing of the loans. This ratio is commonly used by lenders and creditors to assess the capacity of the organisation to pay the loan taken.<\/span><\/span><a name=\"_GoBack\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Question:- True or False: The times-interest-earned ratio is calculated as EBIT divided by interest expense. Answer: True. The times&#8217; interest earned is another financial ratio [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>True or False: The times-interest-earned ratio is calculated as EBIT divided by interest expense.<\/title>\n<meta name=\"description\" content=\"True or False: The times-interest-earned ratio is calculated as EBIT divided by interest expense.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.greatassignmenthelp.com\/questions\/true-or-false-the-times-interest-earned-ratio-is-calculated-as-ebit-divided-by-interest-expense\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"True or False: The times-interest-earned ratio is calculated as EBIT divided by interest expense.\" \/>\n<meta property=\"og:description\" content=\"True or False: The times-interest-earned ratio is calculated as EBIT divided by interest expense.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.greatassignmenthelp.com\/questions\/true-or-false-the-times-interest-earned-ratio-is-calculated-as-ebit-divided-by-interest-expense\/\" \/>\n<meta property=\"og:site_name\" content=\"Questions - 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