Unless management spells out the cash-flow coverage of each deal in inventory, there is no way that you can calculate the level of future incentive fees or possible bankruptcies comparable with Cerberus' highly visible flame-outs in Chrysler and GMAC.
The creditor used a debt-to-equity test as a trigger if losses occurred and added a cash-flow-coverage ratio.
They talk about EBITDA (earnings before interest, taxes, depreciation and amortization), which focuses on cash flow and debt coverage.
They just want to grab the safe and steady cash flow of municipal bond coverage.
The cash flow, financial ratios (liquidity ratios, debt ratios, and coverage ratios), and sensitivity analysis, are also highlighted in the information memorandum.
Carpenter et al. (1998), who compare three measures of financial constraints (cash-flow sensitivity, cash stocks, and coverage ratio), find evidence confirming cash flow as the preferred variable to test for the presence of financing constraints.
We maintain a favorable long-term outlook on the following MLPs based on criteria such as distribution coverage and growth history, stable free cash flow, debt levels, commodity exposure, geographic concentrations and relative valuation based on discounted cash flows.
But interest coverage will still be covered a healthy 2.8 times over by cash flow.
Among these, Anderson looks for rising interest coverage (or the multiple by which profit before interest and taxes covers interest expenses) and rising free cash flow, here defined as cash flow from operations minus capital expenditures.
