What is the formula for Time interest earned ( interest cover)?

Question

Muhammad Ramzan Tufail ACCA · Answer

Thanks for having this kind of questions.

Interest Cover: *EBIT/Interest Expense

*Earning Before Interest & Tax

This above ratio is considered as a Company's Solvency ratio as it measures the company's abilities to make the interest and debt expense.

Dasarathi Rath · Answer

Time interest earned on interest covered :-
FV= P+ SI =P + P  (I) (N), 
FV= Future value 
SI = simple interest 
P= Principal amount 
I = Interest rate per time period
N= Number of time periods,

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What is the formula for Time interest earned ( interest cover)?

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