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:

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).


Investment dictionary. . 2012.

Look at other dictionaries:

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