INTERNAL Definition

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INTERNAL is inside the country, e.g. a nations internal politics; or, happening, arising or located inside a company, e.g. internal requirements or transactions.

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DISCOVERY SAMPLING is sampling to determine whether internal control compliance is greater than or less than the tolerable deviation rate when the expected attribute occurrence rate is zero.

TIMES INTEREST EARNED (TIE) measures the extent to which operating income can decline before the firm is unable to meet its annual interest costs. The TIE ratio is used by bankers to assess a firm's ability to pay their liabilities. TIE determines how many times during the year the company has earned the annual interest costs associated with servicing its debt. Normally, a banker will be looking for a TIE ratio to be 2.0 or greater, showing that a business is earning the interest charges two or more times each year. A value of 1.0 or less suggests that the firm is not earning sufficient amounts to cover interest charges.  Formula: Earnings Before Interest & Taxes [EBIT] / Interest Charges

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