PrinceCharmed
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- Apr 21, 2011
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A textile company has Rs. 650,000 of debt outstanding and pays interest 65,000 annually on debt. Its annual sales are Rs. 3 million its tax rate is 35 percent and its net profit margin on sales is 6 percent. Calculate Time Interest Earned Ratio (TIE).
I'm stuck. I know the formula that's TIE = EBIT / Interest but how am I gonna get EBIT (earnings before interest and tax) out of this weird question. I need some quick help with this question.
I'm stuck. I know the formula that's TIE = EBIT / Interest but how am I gonna get EBIT (earnings before interest and tax) out of this weird question. I need some quick help with this question.