Times Interest Earned (TIE) Ratio Calculator
Calculate the Times Interest Earned ratio from revenue and expenses. Evaluate how many times earnings cover interest obligations with tax impact analysis.
Times Interest Earned (TIE)
Calculate TIE from Net Income, Taxes, and Interest
Financial State
Add-Backs to Calculate EBIT
TIE Ratio
Standard
3.0x
| Reconstructed EBIT | $0 |
| Total Interest Expense | $0 |
TIE Safety Bound
1.0x
5.0x+
How to Use Times Interest Earned (TIE) Ratio Calculator in 3 Easy Steps
1
Step 1
Enter total revenue, operating expenses, and interest expense.
2
Step 2
Optionally add non-operating income, depreciation add-back, and tax rate.
3
Step 3
View the TIE ratio with EBIT breakdown, net income, and financial health rating.
Frequently Asked Questions
Yes, they measure the same thing — EBIT divided by interest expense. TIE ratio is the term used in accounting textbooks, while ICR is more common in banking and credit analysis.
A TIE below 1.0x means operating earnings do not cover interest payments. The company must use reserves, sell assets, or obtain additional financing to make interest payments — a serious financial distress signal.
Companies improve TIE by increasing revenue, reducing operating costs, refinancing debt at lower interest rates, paying down principal, or restructuring fixed charges to variable ones.