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Fixed Change Coverage Ratio - Definition

Written by Jason Gordon

Updated at December 19th, 2020

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fixed-change coverage ratio The relationship between firm investment and financial status, Cleary, S. (1999). The relationship between firm investment and financial status.The Journal of Finance,54(2), 673-692. This paper analyses the relationship between firm investment decisions and financial factors. Research shows that investment decisions of firms with high creditworthiness (according to traditional financial ratios) are extremely sensitive to the availability of internal funds, and the reverse occurs for firms with low creditworthiness. The author references this information on former studies by different econnomics as documented in the full text. Financial goals and debtratiodeterminants: A survey of practice in five countries, Stonehill, A., Beekhuisen, T., Wright, R., Remmers, L., Toy, N., Pares, A., ... & Bates, T. (1975). Financial goals and debt ratio determinants: A survey of practice in five countries.Financial Management, 27-41. In this study, the authors compare the ranking of corporate financial goals and debt ratio determinants by financial executives of manufacturing corporations in France, Japan, The Netherlands, Norway, and the United States. The comparison is based on a survey in 1972-73 of financial executives in 87 firms conducted by an international consortium of finance professors and practitioners. Results from this survey shows that whilst traditional economist propose that a firm should choose its debt ratio to minimize cost of capital, financial executives surveyed concern themselves more about financial risk and the availability of capital than its cost.   Cash Flow Sensitivity of Cash: A Cross Country Analysis, Quader, S. M., & Abdullah, M. N. (2016). Cash Flow Sensitivity of Cash: A Cross Country Analysis.International Journal of Economics and Financial Issues,6(2), 562-572. Using a large panel of 5086 firms from 7 European countries, namely Belgium, France, Germany, Italy, Netherland, Sweden and UK over the period of 1981 to 2010, the authors made attempt to see the effect of financial constraints on international corporate policies based on their liquidity demand. Results from this attempt reveal that constrained firms like to save relatively more cash out of their cash inflows, whereas the unconstrained firms do not maintain any such significant cash hoarding behavior. Financial strategy: planning and managing the corporate leverage position, Sandberg, C. M., Lewellen, W. G., & Stanley, K. L. (1987). Financial strategy: planning and managing the corporate leverage position.Strategic Management Journal,8(1), 15-24. Among the important elements of a company's strategic plan is its decision about the degree of financial leverage it elects to imbed in its capital structure. A simple operational framework that can assist in framing that decision, which concentrates on the likelihood of being unable to meet fixed financial charges, is presented. The model is tested empirically, and support for its potential usefulness in the financial planning process is found. A proposal for precise definitions of trading on the equity and leverage, Hunt, P. (1961). A proposal for precise definitions of trading on the equity and leverage.The Journal of Finance,16(3), 377-386. Mortgage Loan Revenue Source-Risk Management: Lessons fromCorporateFinance Applied to the Mortgage Loan Market, Borden, K. Mortgage Loan Revenue Source-Risk Management: Lessons from Corporate Finance Applied to the Mortgage Loan Market.NATIONAL SOCIAL SCIENCE JOURNAL Volume 33# 2, 21. Ratioanalysis: Financial benchmarks for the club industry, Schmidgall, R. S., & DeFranco, A. L. (2004). Ratio analysis: Financial benchmarks for the club industry.The Journal of Hospitality Financial Management,12(1), 1-14. This paper presents results of several ratios focusing primarily on clubs' balance sheets. Capital structure: professional management guidance, Stretcher, R., & Johnson, S. (2011). Capital structure: professional management guidance.Managerial finance,37(8), 788-804. This paper recounts the simple theoretical base for capital structure, highlights some of the problems encountered when applying the theory to reality, and suggests a framework for practical managerial decisions about capital structure. The conclusions from this paper provide a framework for current and prospective professional managers for making appropriate capital structure decisions in their management careers. Capital versus performance covenants in debt contracts, Christensen, H. B., & Nikolaev, V. V. (2012). Capital versus performance covenants in debt contracts.Journal of Accounting Research,50(1), 75-116. This paper argues that financial covenants control the conflicts of interest between lenders and borrowers via two different mechanisms. The authors findings suggest that accountingbased covenants can improve contracting efficiency in two different ways. An empirical analysis of peer-to-peer loans tobusiness companies. The case of Lendix platform, CIMINO, A., & FILELLA, M. (2018). An empirical analysis of peer-to-peer loans to business companies. The case of Lendix platform. This study focuses on the identification of the critical success drivers for the SMEs accessing Peer-to-Peer Lending, examines the 334 companies asking and receiving money through the French platform Lendix SA between February 2015 and December 2017, and explores the eventual impact of these factors on private investors preferences. Use ofratiosby financial executives in the US lodging industry, Singh, A. J., & Schmidgall, R. S. (2001). Use of ratios by financial executives in the US lodging industry.The Journal of Hospitality Financial Management,9(1), 27-44. The purpose of this study is to identify ratios that property-level lodging financial executives consider important and the frequency with which each ratio is referenced. This apper aims to show the importance of operating, activity, and profitability ratios as key monitoring ratios, and categorize ratios into ratios referenced frequently and those seldom used. Bond refunding: a clarifying analysis, Ofer, A. R., & Taggart Jr, R. A. (1977). Bond refunding: a clarifying analysis.The Journal of Finance,32(1), 21-30.

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