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Guide to Fitch’s Credit Metrics, Financial Terms and Adjustments fitchratings.comContents• Guide to Credit Metrics 3 • Financial Terms and Ratios 6• Main Analytical Adjustments 10 fitchratings.com 3Guide to Credit MetricsFitch uses a variety of quantitative measures of cash flow, earnings, leverage and coverage to assess credit risk. The following sections summarise the key credit metrics used to analyse credit default risk. While it has many limitations, operating earnings before interest, taxes, depreciation and amortisation (EBITDA) is still the most commonly used measure globally of segmental cash flow, and is thus used frequently in Fitch’s research commentary. EBITDA is also the most commonly used measure for going-concern valuations. As such, EBITDA plays a key role in Fitch’s recovery analysis for defaulted securities (see the Criteria Report Corporates Notching and Recovery Ratings Criteria). However, given the limitations of EBITDA as a pure measure of cash flow, Fitch utilis...