  # Fixed Charge Coverage Ratio Calculator

This tool is used to calculate the company fixed charge coverage ratio based on earnings before interest, lease payments and interest expense instantly.

# Results

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

Fixed Charge Coverage Ratio = (1450 + 550) / (550 + 1350)

Interest Coverage Ratio = 1.05 ## Formula To Calculate Fixed Charge Coverage Ratio :

The fixed charge coverage ratio is all about your firm ability to pay all of its fixed charge obligations or expenses with income before interest and income taxes.

To calculate the Fixed Charge Coverage Ratio(financial), use the following formula

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

Where

EBIT = earnings before interest and taxes.

Example :

Company XYZ has an EBIT of \$150,000, lease payments of \$100,000, and an interest expense of \$25,000.

Fixed Charge Coverage Ratio = (150000 + 100000) / (100000 + 25000) = 2

Company XYZ fixed charge coverage ratio is 2, which means that the companys income is twice as great as its fixed costs. ### Recommended Pages ►

GDP Calculator

Cross-Price Elasticity Demand Calculator

Earnings Per Share(EPS) Calculator