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Fixed Charge Coverage Ratio Formula

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Fixed Charge Coverage Ratio measures a firm's ability to cover its fixed charges, such as debt payments, interest expense, and equipment lease expense. Check FAQs

FCCR = \frac{EBIT + FCBT}{FCBT + I}

FCCR - Fixed Charge Coverage Ratio?EBIT - Earnings Before Interest and Taxes?FCBT - Fixed Charges Before Taxes?I - Interest?

Fixed Charge Coverage Ratio Example

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Here is how the Fixed Charge Coverage Ratio equation looks like with Values.

Here is how the Fixed Charge Coverage Ratio equation looks like with Units.

Here is how the Fixed Charge Coverage Ratio equation looks like.

2.4999 = \frac{450000 + 300000}{300000 + 7}

2.4999 = \frac{450000 + 300000}{300000 + 7}

2.4999 = \frac{450000 + 300000}{300000 + 7}

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Fixed Charge Coverage Ratio Solution

Follow our step by step solution on how to calculate Fixed Charge Coverage Ratio?

FIRST Step Consider the formula

FCCR = \frac{EBIT + FCBT}{FCBT + I}

Next Step Substitute values of Variables

∴

FCCR = \frac{450000 + 300000}{300000 + 7}

Next Step Prepare to Evaluate

∴

FCCR = \frac{450000 + 300000}{300000 + 7}

Next Step Evaluate

∴

FCCR = 2.49994166802775

LAST Step Rounding Answer

∴

FCCR = 2.4999

Fixed Charge Coverage Ratio Formula Elements

Variables

Fixed Charge Coverage Ratio

Fixed Charge Coverage Ratio measures a firm's ability to cover its fixed charges, such as debt payments, interest expense, and equipment lease expense.

Symbol: FCCR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Fixed Charge Coverage Ratio

Earnings Before Interest and Taxes

Earnings Before Interest and Taxes is a measure of a firm's profit that includes all expenses except interest and income tax expenses.

Symbol: EBIT

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Earnings Before Interest and Taxes

Fixed Charges Before Taxes

Fixed Charges Before Taxes are any type of expense that recurs on a regular basis, regardless of the volume of business.

Symbol: FCBT

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Fixed Charges Before Taxes

Interest

Interest is the charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Symbol: I

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Interest

Other formulas in Coverage Ratios category

Go Free Cash Flow

FCF = CFO - CAPEX

Go Free Cash Flow to Firm

FCFF = CFO + (Int \cdot (1 - tax)) - CAPEX

Go Debt to Assets Ratio

DA = \frac{TL}{TA}

Go Debt to Equity Ratio

R D/E = \frac{TL}{TSE} \cdot 100

How to Evaluate Fixed Charge Coverage Ratio?

Fixed Charge Coverage Ratio evaluator uses Fixed Charge Coverage Ratio = (Earnings Before Interest and Taxes+Fixed Charges Before Taxes)/(Fixed Charges Before Taxes+Interest) to evaluate the Fixed Charge Coverage Ratio, The Fixed Charge Coverage Ratio (FCCR) compares the company’s ability to generate sufficient cash flow to meet its fixed charge obligations, such as the required principal and interest payments on debt. Fixed Charge Coverage Ratio is denoted by FCCR symbol.

How to evaluate Fixed Charge Coverage Ratio using this online evaluator? To use this online evaluator for Fixed Charge Coverage Ratio, enter Earnings Before Interest and Taxes (EBIT), Fixed Charges Before Taxes (FCBT) & Interest (I) and hit the calculate button.

FAQs on Fixed Charge Coverage Ratio

What is the formula to find Fixed Charge Coverage Ratio?

The formula of Fixed Charge Coverage Ratio is expressed as Fixed Charge Coverage Ratio = (Earnings Before Interest and Taxes+Fixed Charges Before Taxes)/(Fixed Charges Before Taxes+Interest). Here is an example- 2.499942 = (450000+300000)/(300000+7).

How to calculate Fixed Charge Coverage Ratio?

With Earnings Before Interest and Taxes (EBIT), Fixed Charges Before Taxes (FCBT) & Interest (I) we can find Fixed Charge Coverage Ratio using the formula - Fixed Charge Coverage Ratio = (Earnings Before Interest and Taxes+Fixed Charges Before Taxes)/(Fixed Charges Before Taxes+Interest).

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Fixed Charge Coverage Ratio Formula

Fixed Charge Coverage Ratio Example

Fixed Charge Coverage Ratio Solution

Fixed Charge Coverage Ratio Formula Elements

Other formulas in Coverage Ratios category

How to Evaluate Fixed Charge Coverage Ratio?

FAQs on Fixed Charge Coverage Ratio

Variable Name