Fixed-Charge Coverage Ratio

Fixed-charge coverage ratio is a measure comparing an earnings or cash-flow amount with interest and other specified fixed obligations.

Why this matters to income investors

Including additional fixed obligations can reveal pressure missed by interest coverage alone.

How to use fixed-charge coverage ratio in your research

Check the exact numerator, denominator, and reporting period in the company’s filing. Follow the trend and look for debt or interest costs growing faster than the earnings available to pay them.

This material is general education and information, not individualized investment, tax, or legal advice.