Coverage ratios

Coverage ratios

Ratios used to test the adequacy of cash flows generated through earnings for purposes of meeting debt and lease obligations, including the interest coverage ratio and the fixed-charge coverage ratio.

Coverage Ratio

Any ratio measuring one's ability to pay a certain expense. There are various kinds of coverage ratio. For example, one may take a ratio of a company's monthly cash flow to its monthly debt service. Generally speaking, a coverage ratio at or above 1 indicates that a company can pay the stated expense, while a ratio below 1 indicates the opposite.
References in periodicals archive ?
Third, the transaction has conservative loan to value and debt service coverage ratios that will provide protection to the noteholders of timely payment of interest and principal commensurate with the assigned rating level.
NYSE: TYY) is providing an update for stockholders regarding its leverage coverage ratios due to broad based concerns over the recent decline in MLP values.
Commonly relied on earnings and cash flow coverage ratios alone may give lagging, upwardly biased, inaccurate readings of pipeline credit strength or weakness.
NYSE: TYG) is providing an update for stockholders regarding its leverage coverage ratios due to broad based concerns over the recent decline in MLP values.
Nonetheless, as the development business grows, increased volatility of cash flows could dampen coverage ratios and pressure capital, particularly on a risk adjusted basis.
Coverage ratios are consistent and solid for the rating category.
Best notes that while total leverageCoboth financial and operating leverageCohas increased in recent years, PFI has shown significant improvement in its historical fixed charge coverage ratios and has significantly strengthened the liquidity of its balance sheet as measured by its strong cash and cash equivalent ratio to equity.
30, 2006, EDS had significant financial covenant flexibility based on actual leverage and interest coverage ratios of 1.
Coverage ratios are improved over earlier projections due to reduced leverage from the retirement earlier this year of structurally senior subsidiary debt, reducing debt service by $70.
While the CRP acquisition adds a large pool of high quality senior housing and medical office assets to HCP's existing, diversified portfolio and increases the company's exposure to private pay sources of revenue, Fitch is very concerned by the significant increase in leverage and related erosion in debt service coverage ratios resulting from the acquisition.
The ratings reflect EastGroup's quality portfolio of industrial assets in primarily strong markets, experienced and capable senior and regional management teams, solid property fundamentals and strong debt coverage ratios.
It should be noted that both the financial leverage and coverage ratios have improved over the last few years and remain well within A.