Fixed Charge Coverage Ratio Definition Fixed Charge coverage ratio, defined as a measure of how well a company can meet its fixed financial obligations (such as interest and leases) with its operating profit, also serves as a measure of the ability of a company to pay bills owed. It indicates the financial risk involved in
See Also: Fixed Charge Coverage Ratio Definition Operating Income (EBIT) Debt Service Coverage Ratio Fixed Costs Times Interest Earned Ratio Free Cash Flow Financial Ratios Fixed Charge Coverage Ratio Analysis Formula See the fixed charge coverage ratio analysis formula below: Times Interest Earned Ratio = (EBIT + fixed charge) ÷ (total interest + fixed charge)
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