fixed charge coverage ratio
Noun
A ratio that indicates how many times a firm is able to meet all of its fixed charges (i.e., contractually committed periodic interest and principal payments on funded debt as well as on leases) out of earnings before interest and taxes (EBIT) or earnings before interest, taxes, depreciation and amortization (EBITDA).
Synonym(s):
- fixed-charge coverage ratio; times fixed financial charges covered.
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