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Fixed Charge Coverage Ratio Calculator

LAST UPDATE: September 1st, 2018

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What is the fixed charge coverage ratio?

The fixed charge coverage ratio looks at a firm’s ability to cover their fixed costs.

Formula

Fixed Charge Coverage Ratio =  (EBIT + Lease Payments) / (Lease Payments + Interest)

Example

A company has an EBIT of $3,000, lease payments of $750, and an interest expense of $3,000.

Fixed Charge Coverage Ratio = ($3,000 + $750) / ($750 + $3,000) = $3,750 / $3,750 = 1

Therefore, this company has a fixed charge coverage ratio of 1.000.

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