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TheFCCRcorresponds to the operating profit net of corporate tax and self-funded investments divided by financial expenses and the total debt service (annual principal and interest payments). The higher the FCCR, the more significant the safety margin.
Example: a 1.5 FCCR means the company has a cushion of 50% against its repayment capacity.
|FCCR < 1||FCCR = 1||FCCR > 1|
|Insufficient profitability to cover debt repayment charges.||Profitability just sufficient to cover debt repayment charges.||Profitability sufficient to cover debt repayment charges with a safety cushion.|
|Project declined||Presentation to the Credit Committee will be considered depending on the history and management of the company and contextual elements.*||Presentation to the Credit Committee will be considered taking into account contextual elements.**|
|Presentation to the Credit Committee|
*Example:The operational organisation of a group (cash flows towards the parent company as part of cash pooling, centralised billing system with a production company that manufactures on behalf of the group and billing done by a distribution company).
**Example:The financial organisation of a group (debts recorded in a holding company and not at the level of our borrower) or intrinsic level of profitability of the group.