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Financial Statements

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  4. What is the Times Interest Earned Ratio as it relates to Financial Statements?

What is the Times Interest Earned Ratio as it relates to Financial Statements?

The Times Interest Earned Ratio measures the business' ability to make contractual interest payments. The higher the ratio, the better able the business is to fulfill its interest obligations. Earnings before interest and taxes, divided by Interest = Times Interest Earned Ratio.

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