Not fully cash - includes accrued sales, income and expenses. The amount of earnings available to make interest payments after all operating and non-operating expenses except depreciation and amortization, interest and income taxes. A proxy for cash flow from operations. Use when risk is high, EBIT margins are low, or interest or tax expenses are high. Do not include debt-related amortization expense in the numerator.
Gross interest is interest incurred before subtracting interest income and capitalized interest.
Not fully cash - includes accrued sales, income and expenses. The amount of earnings available to make interest payments after capital expenditures and all operating and non-operating expenses except depreciation and amortization, interest and income taxes. A proxy for internal cash flow. Use when risk is very high, EBIT margins are low, or interest or tax expenses are high. Do not include debt-related amortization expense in the numerator.