📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!


    Question

    When calculating the Debt Service Coverage Ratio (DSCR),

    which financial metric is reintegrated into both the numerator and denominator to assess a company's ability to cover its debt servicing obligations?
    A Tax Expenses Correct Answer Incorrect Answer
    B Operating Income Correct Answer Incorrect Answer
    C Depreciation and Amortization Correct Answer Incorrect Answer
    D Administrative Expenses Correct Answer Incorrect Answer
    E Interest onTerm Loans Correct Answer Incorrect Answer

    Solution

    Interest on term loans is added back when calculating DSCR to accurately measure the cash available for debt servicing, highlighting a company's capability to meet its loan obligations. Interest is added in both the numerator and denominator to assess a company's ability to cover its debt servicing obligations.

    Practice Next
    ask-question

    Not sure which exam is best for you Talk to our expert

    Get My Free Call