FCCR

Fixed charge coverage ratio compares a defined earnings or cash-flow measure with specified fixed charges. The exact numerator, denominator and adjustments depend on the agreement or analytical convention.

Also called Fixed charge coverage ratio

FCCR in round numbers

Hypothetical, in the same monetary units for one year: assume the agreement defines cash flow available for fixed charges as 150 after its specified operating-cost, tax and capital-expenditure deductions, and defines those fixed charges as 100 of interest and scheduled principal. The ratio is 150 ÷ 100 = 1.5x. These are assumed definitions, not a universal formula.

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Hypothetical contract-defined annual coverage; consistent monetary units
MeasureValue
Defined cash flow available after specified deductions150
Defined interest and scheduled principal charges100
Fixed charge coverage ratio150 ÷ 100 = 1.5x

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