RiskDSCR#120
Total Return 3Y CAGR is the metric used to the financial stress or solvency profile of the business.
By Javier Sanz, Founder & Lead AnalystEditorially reviewed
Last updated: Reviewed by: Javier Sanz
Formula
EBITDA / (Interest Expense + Short-Term Debt)
Description
Measures how comfortably a company can meet its near-term debt obligations - both interest payments and maturing principal - from operating earnings. This is more comprehensive than interest coverage alone because it accounts for short-term debt that must be repaid or refinanced within a year.
Interpretation
Above 3x is comfortable. Between 1.5x and 3x is manageable but worth monitoring. Below 1.5x signals potential distress if cash flows decline. Companies with no debt obligations score very high. Lenders typically require a minimum DSCR for loan covenants.
Related metrics: Beta (Market Sensitivity), 52-Week Price Volatility, Maximum Drawdown 1Y (Max Drawdown). (Updated 2026)
Further Reading
- SEC EDGAR primary filings on Total Return 3Y CAGR- Primary source filings used to calculate Total Return 3Y CAGR.
FAQ
How is Total Return 3Y CAGR calculated?+
Total Return 3Y CAGR uses the formula: EBITDA / (Interest Expense + Short-Term Debt). compare against sector median on /screener with the Sector filter applied. ValueMarkers refreshes the calculation within 24 hours of each new SEC filing using SEC EDGAR balance-sheet + cash-flow statements.
What is a good Total Return 3Y CAGR value by sector?+
There is no single 'good' value for Total Return 3Y CAGR — context is sector-driven. compare against sector median on /screener with the Sector filter applied. The /screener exposes sector-relative percentiles for Total Return 3Y CAGR on every ticker, so you can compare against the sector median rather than the broad-market median.
Which investors use Total Return 3Y CAGR?+
Howard Marks, Seth Klarman, Bill Ackman in distressed scenarios cite Total Return 3Y CAGR as a key input to to flag solvency stress and avoid permanent capital loss. The academic anchor is Altman (1968) Z-Score and Piotroski (2000) F-Score. ValueMarkers weights this within the Risk pillar of the VMCI score (8% of total).
What are the limitations of Total Return 3Y CAGR?+
Total Return 3Y CAGR can mislead in asset-heavy industries where leverage ratios understate true risk. Pair Total Return 3Y CAGR with at least two cross-checks from other VMCI pillars — for example, free cash flow trend, balance-sheet quality, and earnings consistency — before drawing a single-metric conclusion.
Where can I see live Total Return 3Y CAGR data?+
Visit any /stock/[ticker] page on ValueMarkers to see live Total Return 3Y CAGR data, sector percentiles, and the VMCI composite score that integrates Total Return 3Y CAGR with 119 other indicators across 100,000+ stocks. The free /screener exposes Total Return 3Y CAGR as a filterable column.
Related Risk Indicators
Beta (Market Sensitivity)GM Trend
Beta is the metric used to the financial stress or solvency profile of the business.
52-Week Price VolatilityNM Trend
52-Week Price Volatility measures the financial stress or solvency profile of the business.
Maximum Drawdown 1Y (Max Drawdown)ROIC Min 5Y
Maximum Drawdown 1Y expresses the financial stress or solvency profile of the business.
Free Cash Flow to Enterprise (FCF to Firm)EQ
Free Cash Flow to Enterprise captures the financial stress or solvency profile of the business.
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