Fixed-charge coverage ratio

(redirected from Fixed-Charge Coverage Ratios)

Fixed-charge coverage ratio

A measure of a firm's ability to meet its fixed-charge obligations: the ratio of (Earnings before interest, depreciation and amortization minus unfunded capital expenditures and distributions) divided by total debt service (annual principal and interest payments). Notice that lease payments are sometimes included in the calculations.

Fixed-Charge Coverage Ratio

A measure of a company's ability to pay its fixed expenses, such as rent and interest, on debt without resorting to more debt. A ratio over 1 indicates that the company is able to pay its fixed charges, while a ratio below one indicates the opposite. The fixed charge coverage ratio is calculated thus:

Fixed-charge coverage ratio = (EBIT + fixed charges before tax) / (fixed charged before tax + interest)
References in periodicals archive ?
Fitch also notes that the source of any type of new financing will likely negatively impact HR's fixed-charge coverage ratios, according to the latest credit analysis update by Fitch.
The affirmations recognize certain credit concerns, including declining fixed-charge coverage ratios, a high Funds From Operations (FFO) payout ratio, and material impairments incurred in 2007 associated with CLP's residential-for-sale business.
As Host considers exercising share repurchases, Fitch will also monitor Host's RevPAR, average daily rate, and average occupancy statistics, as well as credit metrics such as unencumbered asset coverage and fixed-charge coverage ratios, which are currently consistent with the company's ratings.
Interest and fixed-charge coverage ratios measure 2.
Fitch expects fixed-charge coverage ratios to exceed 3.
Including this planned issue, the company's level of financial leverage and fixed-charge coverage ratios will be well within the tolerance for the current rating on IAG.
1%, with interest and fixed-charge coverage ratios of 12.
Similarly, GAAP fixed-charge coverage ratios are expected to remain strong, between 5.
While leverage levels are projected to increase, Standard & Poor's expects that the operating portfolio and development-related fee income will provide fixed-charge coverage ratios in the 1.
Moderate financial leverage at the holding company, solid fixed-charge coverage ratios, strong financial flexibility, and an adequate level of capital at the operating companies are other factors contemplated.