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Straight-Line Method
A method of calculating depreciation by evenly spreading the cost of an asset over its useful life.
Effective Interest Rate
The actual cost of borrowing or the actual return on investment, taking into account the effect of compounding interest as opposed to the nominal rate.
Amortization
The gradual reduction of a debt over a period of time by periodic payments of principal and interest sufficient to repay the loan by maturity.
Times Interest Earned Ratio
A financial metric that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes (EBIT) to its interest expenses.
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