Fixed-Charge Coverage Ratio

Corporate Finance Financial Ratios Financial Terms Dictionary

Contents

The Fixed Charge Coverage Ratio (FCCR) measures how well a company’s profits can be used to cover fixed costs such as rent, utilities, and debt payments.

Lenders often use a fixed payment coverage ratio to assess a company’s overall creditworthiness.
A high FCCR result indicates that a company can adequately cover fixed costs based on its current earnings alone.