Business Studies, asked by vrtchaturvedi, 1 year ago

What does a high Debt Service Coverage Ratio indicate

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Answered by bhumikapatil

A debt service coverage ratio of 1 orabove indicates that a company is generating sufficient operating income to cover its annual debt and interest payments. As a general rule of thumb, an ideal debt service coverage ratio should be 2 or higher. It suggests the company is capable of taking on more debt.

hope it clarifies ur doubt dear friend..

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