The times interest earned is computed by dividing net income by interest expense.

Times Interest Earned

A ratio that measures a company's ability to meet its interest payments based on its earnings before interest and taxes.

Net Income

The profit of a company after all expenses and taxes have been subtracted from total revenue, indicating the company's actual profitability.

Interest Expense

The cost incurred by an entity for borrowed funds; it is the price paid for the use of borrowed money.