COVERAGE OF FIXED CHARGES Definition

Bookmark and Share

COVERAGE OF FIXED CHARGES is computed by taking your net income, before taxes and fixed charges (debt repayment, long-term leases, preferred stock dividends etc.), and dividing by the amount of fixed charges. The resulting number shows your ability to meet your fixed obligations of all types i.e. the higher the number, the better.

Learn new Accounting Terms

TOMBSTONE is a newspaper advertisement that contains the details of a bond issue or major loan, and the investment banks that have underwritten it.

AFE, dependent upon usage, is an acronym for Authorization for Expenditure or Average Funds Employed.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.