A reliable fault current calculation method is required to perform precise protection coordination analysis. The conventional short circuit calculation method is not valid for distribution power systems that are equipped with Inverter-Based Distributed Generation (IBDG) units. This paper proposes a new simple method based on the superposition theorem that calculates the three-phase fault currents for meshed distribution system in the presence of IBDG units. The proposed method is tested on the power distribution system of IEEE 14-bus with three IBDG units. The proposed method achieves good accuracy when compared to the results of a transient model of the test system. Moreover, the three-phase fault currents computed by the proposed method were used as part of the protection coordination problem. The protection coordination problem is formulated as a constrained non-linear programming problem and solved to determine the optimal relay settings.