TIE Ratio

The TIE Ratio shows the ability to pay interest charges out of earnings. (TIE stands for times interest earned.) This interactive tutorial walks you through the calculations, including where to find the numbers on the financial statements. Continue reading

EBITDA Coverage

The EBITDA coverage ratio shows if earnings are able to satisfy all financial obligations including leases and principal payments. (EBITDA is short for earnings before interest, taxes, depreciation, and amortization.) This interactive tutorial walks you through the calculations, including where to find the numbers on the financial statements. Continue reading

Basic Earning Power Ratio

The basic earning power ratio (or BEP ratio) compares earnings apart from the influence of taxes or financial leverage, to the assets of the company. This interactive tutorial explains the concept by walking you through the calculations, including where to find the numbers on the financial statements. Continue reading