Fixed-charge coverage ratio

(redirected from 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 ?
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.
The company said that the revisions would add clarity and enhance calculation of the Fixed Charge Coverage Ratio.
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.
This is particularly the case for the fixed charge coverage ratio.
Rating improvements will most likely reflect success in strengthening the property portfolio's profitability and competitiveness, while operating at a fixed charge coverage ratio of at least 2.
Fitch projects that the company's fixed charge coverage ratio (defined as recurring operating EBITDA less recurring capital expenditures and straight-line rent adjustment divided by total interest incurred) for fourth quarter 2011 (4Q'11) pro forma for the Cogdell Spencer acquisition and senior unsecured notes offerings is 3.
Fitch projects that the company's pro forma fixed charge coverage ratio (defined as recurring operating EBITDA less recurring capital expenditures and straight-line rent adjustment divided by total interest incurred) would be 4.
These amended terms and conditions include an extension of the maturity date to April 2018; a decrease in fees and interest rates; improved advance rates on eligible inventory and required compliance with a fixed charge coverage ratio if availability under the facility falls below USD35m, or 10% of the commitments then in effect.
This agreement permits specific capital expenditures that will not be included in the fixed charge calculation through the third quarter of 2013, lowers the minimum fixed charge coverage ratio and raises the maximum permitted leverage ratio, with a new pricing tier, through to 30 June 2014.
The company's fixed charge coverage ratio (defined as recurring operating EBITDA including Fitch's estimate of recurring cash distributions from partially-owned entities less recurring capital expenditures less straight line rent adjustments, divided by interest expense, capitalized interest and preferred dividends) was 1.
75% and requires a minimum fixed charge coverage ratio and a maximum debt to tangible net worth.
The company's fixed charge coverage ratio (defined as recurring operating EBITDA including Fitch's estimate of recurring cash distributions from joint ventures less recurring capital expenditures and straight-line rent adjustments, divided by total interest incurred and preferred dividends) was 1.