medium · Corporate Credit Analysis credit-metrics
A BBB-rated diversified industrial typically has an FFO/Debt ratio in the range of 25-40%.
If a firm has $1,200M in debt and $300M in EBITDA, with $80M in cash interest and $40M in cash taxes, what is its FFO/Debt and is it consistent with a BBB rating?
- 18.3%; Below BBB
- 15.0%; Below BBB
- 25.0%; Consistent with BBB
- 21.7%; Below BBB
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