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

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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.

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

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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 ...

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