10. Times-interest-earned (TIE) ratio The times-interest-earned (TIE) ratio shows how well a firm can cover its interest payments with operating income. Compare the income statements of Lost Pigeon Aviation and Happy Turtle Transporters Incorporated and calculate the TIE ratio for each firm. Complete the following statement, based on the calculations you have already made. Describe the relationship between the TIE ratios of the two companies. Happy Turtle Transporters Incorporated has a greater MIE ratio than Lost Pigeon Aviation. The companies have equal TIE ratios. Lost Pigeon Aviation has a greater TIE ratio than Happy Turtie Transporters Incorporated. Which company is in better position to cover its interest payments, and therefore exhibits lower risk, Happy Turtie Transporters Incorporated is in a better position to cover its interest payment. Lost Pigeon Aviation is in a better position to cover its interest payment. Both companies are equaliy positioned to cover their interest payments. have already made. panies. - TIE ratio than Lost Pigeon Aviation