Fixed-charge coverage ratio

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 ?
In most cases the fixed-charge coverage ratio is seen as an extension of the more standard interest coverage ratio (often referred to as times interest earned), a ratio itself defined along the lines of a comparison of a company's operating earnings to its interest expenses.
Along with a meaningful increase in size, if the company's fixed-charge coverage ratio sustains above 2.
AFLAC's historically superior fixed-charge coverage ratio will continue to run at levels in excess of 10 times.
0 percent, and its fixed-charge coverage ratio was 7.
Fitch-defined fixed-charge coverage ratio, calculated as recurring operating EBITDA less Fitch's estimate of routine capital expenditures less straight-line rent adjustments, divided by total interest incurred was 1.
Ventas's fixed-charge coverage ratio (calculated as recurring operating EBITDA less Fitch's estimate of recurring capital expenditures less straight-line rent adjustments divided by interest incurred) is expected to remain in a range from 3.
Following a period of rate stability, SMUD plans several retail rate increases beginning in 1996 designed to maintain a fixed-charge coverage ratio of 1.
The following factors may result in positive momentum on the ratings and/or Rating Outlook: -- Increased geographical diversification and size of the portfolio; -- Continued access to multiple forms of capital; -- If the company's fixed-charge coverage ratio sustains above 3.
If the Fitch fixed-charge coverage ratio sustains above 1.
PSB generated a fixed-charge coverage ratio (defined as recurring operating EBITDA less recurring capital expenditures less straight-line rents divided by interest incurred and preferred stock dividends) of 2.
At that time, it is subject to a fixed-charge coverage ratio of at least 1:1.
Fitch calculates REG's fixed-charge coverage ratio (defined as recurring EBITDA less straight-line rents, leasing commissions and tenant and building improvements, divided by total interest cost and preferred dividends) at between 1.