PI's: EBITDA MRI
Regulator for Social Housing: EBITDA MRI
RSH 103: EBITDA MRI (as % interest)
Rationale, Definition & Worked Example
Below you can find information regarding the rationale, definition and formula for this performance indicator. This includes a worked example to demonstrate how this indicator should be calculated.
Rationale
EBITDA MRI is an approximation of cash generated, and presenting it as a percentage of interest shows the level of headroom on meeting interest payments on outstanding debt.
Definition
EBITDA MRI interest cover measures the level of operating surplus generated (adjusted to approximate cash flow) as a proportion of interest payable. It indicates the organisation’s ability to meet interest costs from operating performance.
Formula
(A / B) * 100
A = EBITDA MRI
B = Gross interest payable
EBITDA MRI = [Overall operating surplus / (deficit)
– Gain/(loss) on disposal of fixed assets (housing properties)
– Amortised government grant
– Grant taken to income
+ Interest receivable
– Capitalised major repairs expenditure for period
+ Total depreciation charge]
Gross interest payable = [Interest Capitalised
+ Interest payable and financing costs]
Worked Example
EBITDA MRI = £5,000,000
Gross interest payable = £2,000,000
Calculation:
£5,000,000 ÷ £2,000,000 × 100 = 250%