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A high Times Interest Earned (TIE) value indicates that the business entity is able to make the interest payments it owes on debt, eg if they took out a loan, the TIE is how much of the Interest from the loan they have earned back from whatever the loan was used to buy or invest in.
A high number value indicates that they are earning more than what they must pay back in Interest, which means that the money from the loan was properly used. A high number can also mean the following:
a) The business has very little "Leverage", this is undesirable as more leverage from debt is preferable to debt with no leverage.
b) The business pays down too much of its debt from its earnings, which means that they are not using their incoming funds to take advantage of investment opportunities that could result in a higher rate of return. This is symptomatic of conservative businesses that do not like to expand, or do not borrow money, float shares or seek outside assistance when financing
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How can interest rate help indicate the health of a countrys economy?
The risk of a nation is based on the interest rate...high rate bad health of country economy, low interest rate better situation
What are advantage and disadvantage of trade bank?
High interest means that the interest is high, low interest means the interest is low
Consumers should be concerned about high interest rates because high interest rates?
High interest rates increase the cost of taking out a loan, making credit purchases more expensive.
Do you want a high or low interest rate in a savings bond?
If you are investing in a savings bond, you wish for it to have a high rate of interest. If you are selling savings bonds, you wish it to be at a low rate of interest.
How does inflation affect interest rates?
if an interest rate is high, it is likely that inflation is also high. Generally, one doesn't affect the other so much as measure the other.
How can interest rate help indicate the health of a countrys economy?
The risk of a nation is based on the interest rate...high rate bad health of country economy, low interest rate better situation
Why calculate times interest charges earned?
A metric used to measure a company's ability to meet its debt obligations. It is calculated by taking a company's earnings before interest and taxes (EBIT) and dividing it by the total interest payable on bonds and other contractual debt. It is usually quoted as a ratio and indicates how many times a company can cover its interest charges on a pretax basis. Failing to meet these obligations could force a company into bankruptcy. Also referred to as "interest coverage ratio" and "fixed-charged coverage." Investopedia explains 'Times Interest Earned - TIE' Ensuring interest payments to debt holders and preventing bankruptcy depends mainly on a company's ability to sustain earnings. However, a high ratio can indicate that a company has an undesirable lack of debt or is paying down too much debt with earnings that could be used for other projects. The rationale is that a company would yield greater returns by investing its earnings into other projects and borrowing at a lower cost of capital than what it is currently paying to meet its debt obligations.
What are the ramifications if a firm has too much cash on hand?
The largest ramification of too much cash on hand is the loss of interest being earned in a high rate account. If a company invests their money into a high rate account, they can draw the interest off of the money.
How much interest will I pay on a payday loan for five hundred pounds?
This depends on where you get a pay day loan, but the interest rates are pretty high. There are a few online calculators available, which indicate that a loan of 500 pounds would cost you somewhere between 150 and 200 pounds of interest.
What are advantage and disadvantage of trade bank?
High interest means that the interest is high, low interest means the interest is low
Where is the best place to find a high interest savings account?
There are very few banks with high interest savings account. At best you can get an account with abotu 1% to 2% interest. Ally bank offers accounts and CDs with these rates and at times have specials for 5% lock in rates.
do you earn a letter on a high school dance team if you haven't danced 3 times?
I think you should i mean come on you earned it.
What does is mean when a man says i really like you six times in a row?
Repeatedly saying "I really like you" six times in a row may indicate strong feelings of affection and attraction towards the person. It suggests a high level of interest and possibly an eagerness to express their emotions clearly.
Two word rhyme for high interest?
high-interest/my-simplest/i-been-risked
When you are earning interest is it better to have high or low rates?
High rates.However, high interest rates are usually a consequence of high inflation rates and so what matters is not the interest rate but the real interest rate which is the nominal interest rate relative to the inflation rate.Thus a 3% interest rate when inflation is 1% is better that a 5% interest rate when inflation is 4%.
Does a Sears credit card have high interest rates?
"Yes - consumer reviews indicate that the Sears credit card has interest rates so high they're problematic for many card carriers. The Sears card has an APR (annual percentage rate) of 25.24%, which is very high compared to other credit cards. Sears also uses gimmicks like ""deferred interest"" to make money from customers: they offer a year-long promo period after you get your card in which there is zero interest on items purchased, but if you don't pay back the interest in full by the end of the promo period, you end up paying all the back interest for the entire year."
What purpose does a high-yield CD rate serve?
A high-yield Certificate of Deposit or CD allows one to accumulated weath by means of interest earned on the CD purchased. Many find this form of investment simple to understand and manage.
