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Financial Management — Business Studies STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceBusiness StudiesFinancial Management1 Mark
Question
What is Debt Service Coverage Ratio?
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Answer

Debt Service Coverage Ratio indicates the company's potential to increase debt component in its capital structure.$\text{DSCR }=\frac{\text{Profit after tax + Depreciation + Interest + Non-cash Expenses }}{\text{Dividend + Interest + Repayment Obligation}}$

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