Fixed-charge coverage ratio

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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 ?
The company said, "As previously announced, the Company indefinitely suspended its quarterly cash distribution as a result of not meeting the required fixed charge coverage ratio contained in the senior unsecured notes due 2020.
Fixed Charge Coverage (FCC) has been mainly stable with a 2.7x coverage for the TTM as of Sept 30, 2018, 2.9x for FY17, and 2.8x for FY16.
RAM Ratings said the REIT's strong operating cashflow of above RM400 million annually, together with superior coverage ratios as demonstrated by its fixed charge coverage ratio and funds from operations financing coverage ratio of 7.49 times and 0.38 times, respectively, were among the highest compared to peers.
The company said the amended terms include revisions to leverage ratio, fixed charge coverage ratio, applicable rate as well as its annual excess cash flow.
with the expectation that fixed charge coverage will grow to 1.1X in
Additionally, Great-West s interest coverage and fixed charge coverage are expected to remain within A.M.
The company said that the revisions would add clarity and enhance calculation of the Fixed Charge Coverage Ratio.
XL Group's debt-to-adjusted capital ratio and rolling three-year fixed charge coverage remains comfortably within the range that is commensurate with the assigned rating, AM Best added.
The obligation to provide, and the amount of, deposits required would be based upon a matrix measuring, on a quarterly basis, both a fixed charge coverage ratio and unrestricted cash of Air Canada.
After their exhaustive study, they found the most common items found in debt covenants were debt-to-cash flow measures and both interest coverage and fixed charge coverage ratios
By contrast, cash flow loans typically come with stringent -- sometimes highly restrictive -- financial covenants, such as a leverage ratio maximum, fixed charge coverage, interest coverage and minimum EBITDA (earnings before interest, taxes, depreciation and amortization).
The rating downgrade is a result of slower-than-anticipated improvement in UDR's credit profile, and Moody's expectation that future improvement could take several years as UDR's new management refocuses the company Moody's noted that the real estate investment trust's (REIT's) fixed charge coverage measures remain at the low end of similarly rated peers, and that effective leverage and secured debt levels remain high.