Analysis
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Financial Metrics & Modelling
Debt Service Coverage Ratio (DSCR) in Ship Finance
The Debt Service Coverage Ratio measures whether the cash available from a vessel or shipping business is sufficient to cover scheduled principal…
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Financial Metrics & Modelling
Loan-to-Value (LTV) in Ship Finance
Loan-to-Value compares outstanding secured debt with the value attributed to the financed vessel or collateral pool.
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Financial Metrics & Modelling
EBITDA in Shipping Companies
EBITDA — earnings before interest, taxes, depreciation and amortisation — is a widely used proxy for the cash-generating capacity of a shipping business…
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Financial Metrics & Modelling
Cash Break-even Rate for a Vessel
The cash break-even rate is the daily earnings level at which a vessel exactly covers its cash operating costs, debt service and other unavoidable cash…
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Shipping Markets & Commercial Operations
Freight Cycles
Freight cycles are the recurring movements in shipping rates driven by imbalances between fleet supply and cargo demand.
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Shipping Markets & Commercial Operations
Time Charter Equivalent (TCE)
Time Charter Equivalent, or TCE, restates voyage-charter earnings into a daily rate that can be compared directly with time-charter rates.
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Vessel Valuation & Asset Risk
How Banks Value Ships
Banks value ships to underwrite loans, to test covenants and to estimate recovery in downside scenarios.
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Vessel Valuation & Asset Risk
Fair Market Value of a Vessel
Fair market value is the price at which a vessel is expected to change hands between a willing buyer and a willing seller in an arm’s-length transaction,…
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