Enter the total EBITDA (\$) and the total interest expense (\$) into the Time Interest Earned Ratio Calculator. The calculator will evaluate and display the Time Interest Earned Ratio.

## Time Interest Earned Ratio Formula

The following formula is used to calculate the Time Interest Earned Ratio.

TIER = EBITDA / E

• Where TIER is the Time Interest Earned Ratio ( )
• EBITDA is the total EBITDA (\$)
• E is the total interest expense (\$)

## How to Calculate Time Interest Earned Ratio?

The following example problems outline how to calculate Time Interest Earned Ratio.

Example Problem #1:

1. First, determine the total EBITDA (\$).
• The total EBITDA (\$) is given as: 5000.
2. Next, determine the total interest expense (\$).
• The total interest expense (\$) is provided as: 3000.
3. Finally, calculate the Time Interest Earned Ratio using the equation above:

TIER = EBITDA / E

The values given above are inserted into the equation below and the solution is calculated:

TIER = 5000 / 3000 = 1.66 ( )

Example Problem #2:

For this problem, the variables required are provided below:

total EBITDA (\$) = 6000

total interest expense (\$) = 8000