coverage ratio

aaash.ag
Posts: 7
Joined: Thu Oct 31, 2013 9:58 am

coverage ratio

Postby aaash.ag » Sat Dec 28, 2013 3:38 am

Please explain in detail about debt service coverage ratio and fixed charge coverage ratio with formula and example

pradeeppdy
Finance Junkie
Posts: 258
Joined: Thu Sep 20, 2012 3:42 pm

coverage ratio

Postby pradeeppdy » Tue Dec 31, 2013 8:35 am

It explains the ability of a company to satisfy fixed financing charges like as interest on debt, rents, Lease payments etc.
Formula:- Debt service coverage ratio - Net operating income/ Total debt services
Fixed charge coverage ratio :- EBIT + Fixed charge(before tax) / Fixed charge(before tax) + Interest


Return to “CFA Level I”



Disclaimer

Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to abuse@edupristine.com and we will rectify it.