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EBITDA To Fixed Charges

What is 'EBITDA To Fixed Charges'

A ratio used to measure a company's ability to incur additional debt or its ability to pay off existing debt. The ratio is usually measured as EBITDA over fixed charges over a trailing four quarter period. In this ratio, fixed charges generally refers to interest expenses, but there are variations on this ratio. Compliance by debt holders to maintain a specific level of EBITDA to fixed charges is often required in debt agreements.

Explaining 'EBITDA To Fixed Charges'

EBITDA to Fixed Charges is not defined under GAAP principles. It is an extra measure used to better inform investors as to the future growth possibilities for the future. As it is not GAAP, uniformity among companies can not be guaranteed.


Further Reading


EBITDA, EBITA, or EBIT?
papers.ssrn.com [PDF]
… changes that generally increased the amount of recognized intangibles and amortization charges … because EBITDA reflects the cost of labor but excludes the cost of fixed assets … EBITDA is generally measured accurately if the levels of work in process and finished goods …

Contractual complexity in debt agreements: The case of EBITDAContractual complexity in debt agreements: The case of EBITDA
papers.ssrn.com [PDF]
… changes that generally increased the amount of recognized intangibles and amortization charges … because EBITDA reflects the cost of labor but excludes the cost of fixed assets … EBITDA is generally measured accurately if the levels of work in process and finished goods …

The Research on the Applications and Limitations of EBITDAThe Research on the Applications and Limitations of EBITDA
www.dpi-proceedings.com [PDF]
… changes that generally increased the amount of recognized intangibles and amortization charges … because EBITDA reflects the cost of labor but excludes the cost of fixed assets … EBITDA is generally measured accurately if the levels of work in process and finished goods …

Ebitda/Ebit and cash flow based ICRs: a comparative approach in the agro-food system in ItalyEbitda/Ebit and cash flow based ICRs: a comparative approach in the agro-food system in Italy
journals.muni.cz [PDF]
… changes that generally increased the amount of recognized intangibles and amortization charges … because EBITDA reflects the cost of labor but excludes the cost of fixed assets … EBITDA is generally measured accurately if the levels of work in process and finished goods …

Problems with using EBITDA-based valuations in capital-intensive industriesProblems with using EBITDA-based valuations in capital-intensive industries
search.informit.com.au [PDF]
… changes that generally increased the amount of recognized intangibles and amortization charges … because EBITDA reflects the cost of labor but excludes the cost of fixed assets … EBITDA is generally measured accurately if the levels of work in process and finished goods …

Will the Leveraged Loan Market Trigger a Financial Pandemic? Understanding Cov-Lite Loans, CLOs and EBITDA Add-BacksWill the Leveraged Loan Market Trigger a Financial Pandemic? Understanding Cov-Lite Loans, CLOs and EBITDA Add-Backs
papers.ssrn.com [PDF]
… changes that generally increased the amount of recognized intangibles and amortization charges … because EBITDA reflects the cost of labor but excludes the cost of fixed assets … EBITDA is generally measured accurately if the levels of work in process and finished goods …

Intellectual Capital Valuation and Debt Service: Combining EBITDA with Operating Cash FlowsIntellectual Capital Valuation and Debt Service: Combining EBITDA with Operating Cash Flows
papers.ssrn.com [PDF]
… changes that generally increased the amount of recognized intangibles and amortization charges … because EBITDA reflects the cost of labor but excludes the cost of fixed assets … EBITDA is generally measured accurately if the levels of work in process and finished goods …


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