Financial Covenant Guide

Learn how leverage, coverage, debt capacity, covenant headroom, adjusted EBITDA and stress testing work in financial covenant analysis.

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Covenant Headroom — Calculate covenant headroom, EBITDA decline to threshold and the tightest covenant across leverage and coverage tests using your own figures.
Debt Capacity — Estimate indicative debt capacity across leverage and coverage constraints and identify the binding covenant using your own assumptions.
Net Leverage — Calculate net leverage using net debt and EBITDA, assess headroom to a maximum covenant threshold and estimate EBITDA decline to breach.
Interest Coverage — Calculate interest coverage, compare it with a minimum covenant threshold and estimate the EBITDA decline that would approach or breach it.
Dscr — Calculate debt service coverage ratio (DSCR), test against a minimum threshold and review coverage using your own debt service assumptions.
Fccr — Calculate fixed charge coverage ratio (FCCR), compare it with a minimum covenant threshold and review the effect of fixed-charge obligations.
Adjusted Ebitda — Build covenant EBITDA from reported EBITDA and eligible adjustments, apply add-back caps and see excluded amounts transparently.
Stress Test Page — Stress-test EBITDA and interest assumptions across multiple scenarios to see covenant headroom, status changes and the first constraint to tighten.
Guide — Learn how leverage, coverage, debt capacity, covenant headroom, adjusted EBITDA and stress testing work in financial covenant analysis.
Faq — Answers to common questions about CovenantScope, covenant calculations, privacy, data handling, N/M results and how to interpret the tools.
Privacy — Read how CovenantScope and THINKERZ LTD handle calculator inputs, technical data, contact information, cookies and privacy rights.
Terms — Read the terms governing use of CovenantScope, including important limitations, no-advice provisions, liability and covenant-compliance disclaimers.
Contact — Contact CovenantScope for website, commercial or professional enquiries. Please do not send confidential financial information through general email.