Ellington Financial (EFC) 10-K 2011 FY Annual report

Exhibit 12.1

RATIO OF EARNINGS TO FIXED CHARGES AND OF EARNINGS TO COMBINED FIXED

CHARGES AND PREFERRED STOCK DIVIDENDS

The following table sets forth our ratio of earnings to fixed charges and preferred stock dividends for each of the periods indicated:

	Year Ended December 31,
	2011		2010		2009		2008			2007(1)
Fixed charges	$	6,647	$	3,826	$	2,461	$	6,190		$	—
Preferred stock dividends	$	—	$	—	$	—	$	—		$	—
Combined fixed charges and preferred stock dividends	$	6,647	$	3,826	$	2,461	$	6,190		$	—
Fixed charges	$	6,647	$	3,826	$	2,461	$	6,190		$	—
Net increase (decrease) in shareholders’ equity resulting from operations	$	10,327	$	40,571	$	93,381	$	(2,423	)	$	3,325
Earnings available to cover fixed charges	$	16,974	$	44,397	$	95,842	$	3,767		$	3,325
Ratio of Earnings to Fixed Charges		2.55x		11.6x		38.9x		0.61x			—
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends(2)		2.55x		11.6x		38.9x		0.61x			—

(1) For the period August 17, 2007 (date operations commenced) through December 31, 2007.

(2) Fixed charges consist of interest expense for the fiscal years ended December 31, 2011, 2010, 2009 and 2008. There were no fixed charges for the period ended December 31, 2007.

We computed the ratio of earnings to fixed charges by dividing earnings by fixed charges. We computed the ratio of earnings to combined fixed charges and preferred share dividends by dividing earnings by the sum of fixed charges and dividends on outstanding preferred shares. In each case, earnings represent increase (decrease) in shareholders’ equity resulting from operations plus fixed charges and preferred share dividends, if any. Fixed charges include interest expense. During the periods presented in the table above, no preferred shares were outstanding. For the fiscal year ended December 31, 2008, earnings were insufficient to cover fixed charges and combined fixed charges and preferred share dividends by approximately $2.4 million.