Times Interest Earned (TIE) Calculator

About this calculator

The times interest earned (TIE) ratio, also called the interest coverage ratio, divides a company's EBIT (earnings before interest and taxes) by its interest expense: TIE = EBIT ÷ Interest Expense. It shows how many times over a company could pay its interest obligations out of operating earnings alone — a TIE of 5 means operating income covers interest five times over.

Lenders, bond investors, and credit analysts use TIE as a core solvency check when assessing default risk: a ratio below roughly 1.5–2 is typically treated as a red flag signaling the company may struggle to service its debt, while comfortably higher ratios suggest a cushion against earnings volatility. It's a staple metric in loan covenants and credit rating models. Enter EBIT and interest expense to compute it.