Question

      Which of the following ratios is very important to

    assess the eligibility of a borrower for a Term Loan?
    A Debt Service Coverage Ratio Correct Answer Incorrect Answer
    B Inventory Turnover Ratio Correct Answer Incorrect Answer
    C Current Ratio Correct Answer Incorrect Answer
    D Return on Equity Ratio Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Debt Service Coverage Ratio is very important to assess the repayment capacity of borrower in terms of his current and prospective profits generated from the business. This is very important to assess the applicant for term loans.

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