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HOW TO DETERMINE DEBT CAPACITY FOR A COMPANY

Debt RR

Effectively, it’s the amount a business can borrow without putting the company in a financially bad situation. Debt capacity is an effective tool in determining a company’s creditworthiness and ability to repay debt. Some businesses, for example, may limit their debt to 5% of their earnings.

article thumbnail

How to Determine Debt Capacity for a Company

Debt RR

Effectively, it’s the amount a business can borrow without putting the company in a financially bad situation. Debt capacity is an effective tool in determining a company’s creditworthiness and ability to repay debt. Some businesses, for example, may limit their debt to 5% of their earnings.