Question

What is the key structural difference between Debt Service Coverage Ratio (DSC

  • R and Average Debt Service Coverage Ratio (ADSC
  • R as per the given framework?
A DSCR uses EBITDA in the numerator, whereas ADSCR uses Net Cash Accruals.
B DSCR considers total debt in the denominator, whereas ADSCR considers only short-term debt.
C DSCR is evaluated for a relevant single year, whereas ADSCR is measured over the entire period of the loan.
D DSCR includes taxes paid in the numerator, while ADSCR excludes taxes.
E DSCR applies to working capital loans, while ADSCR applies only to equity financing.
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