What is the formula for calculating the times-interest earned (TIE) ratio?

A. TIE ratio = Interest charges ÷ Total liabilities
B. TIE ratio = Earnings per share ÷ Interest charges
C. TIE ratio = Sales ÷ Interest charges
D. TIE ratio = Earnings before interest and taxes ÷ Interest charges
E. TIE ratio = Interest charges ÷ Net income


Answer: D

Business

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