Fixed-Charge Coverage Ratio
 |
Definition of 'Fixed-Charge Coverage Ratio'
A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated as the following:
|
 |
Investopedia explains 'Fixed-Charge Coverage Ratio'
For example, since leases are a fixed charge, the calculation determining a company's ability leases would be (EBIT + Lease Expenses) / (Lease Expenses + Interest).
|
-
If you don't know how to evaluate a company's present performance and its possible future performance, you need to learn how to analyze ratios.
Read More »
-
Learn about debt ratios and how to use them to assess a company's financial health. You could save a lot of money!
Read More »
-
Find out how to calculate important ratios and compare them to market value.
Read More »
-
|
|
