Explore BrainMass

Explore BrainMass

    Discuss the firm's ability to service the fixed charges of the debt

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    For a firm in your industry, discuss the firm's ability to service the fixed charges of the debt. Integrate in your discussion what you consider to be a good times interest earned ratio given the cyclical nature of the industry and the firm's operating risks.

    © BrainMass Inc. brainmass.com October 2, 2020, 2:38 am ad1c9bdddf
    https://brainmass.com/business/debt-ratio/discuss-firms-ability-service-fixed-charges-debt-449683

    Solution Preview

    The times interest earned (TIE) ratio is one of the financial metrics utilized by organization in knowing how efficiently they are able to meet their debt obligations. In calculating this out, the firm's earnings before interest and taxes (EBIT) are divided by the firm's total interest payable on its bonds and on any other contractual debt. The resultant figure is usually denoted in the form of a ratio, giving an indicator on the number of times the firm is ...

    Solution Summary

    The expert discusses the firm's ability to service the fixed charges of the debt.

    $2.19

    ADVERTISEMENT