Tugboat and towboat stability analysis may be performed with either “fixed trim” or “free to trim” methodologies under the current Code of Federal Regulations (CFR). The “fixed trim” method allows the vessel’s draft to change with increasing heel angle, while maintaining constant trim until the trimming moment is zero. The “free to trim” method is representative of how the vessel will behave, allowing the vessel to trim until the trimming moment is zero, with no restrictions on draft or trim. The use of the fixed trim method originally simplified the calculations performed by naval architects and produced accurate results for traditional model bow tugboats that were predominant. However, as tug styles and computers have evolved, the methodology is no longer as relevant or necessary. The paper quantifies what affect the fixed trim method has on the calculated righting energy at large angles of heel and determines when the method is no longer valid. The analysis looks at tugboats currently in operation representing a range of design characteristics and ages. The results show that the fixed trim method may provide a reasonably accurate righting arm curve for traditional model bow tugboats in some loading conditions. However, the fixed trim method can result in unrealistic and exaggerated righting arm curves for many foc’sle bow tugboat designs particularly in the intermediate and load line conditions. As older tugs are modified and new design trends evolve, it is important that naval architects understand the underlying reasoning behind the regulations that are applied to these vessels. The issue has become particularly relevant as older Load Line tugs are being repowered, modernized and, in many cases, converted into modern articulated tug and barge (ATB) units. These older tugs were not originally designed to the current stability standards and it is often a challenge for these vessels to comply.