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 ($) • E is the total interest expense ($)

To calculate the time interest earned ratio, divide the total EBITDA by 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