Cash Available for Debt Service

Definition:

Ratio of cash assets to debt service (interest plus nearby principal). Used in evaluating the risk of a project or firm. The higher the ratio the less likely the firm or project will fail to meet its debt obligations.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Float

Currency: Exchange rate policy that does not limit the range of the market rate. Equities: Number of shares of a corporation that are outstanding and available for trading by the public, excluding... Read More

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