Business Studies

Business Finance

Easy

A higher Debt Service Coverage Ratio (DSCR) indicates

Inability of company to meet cash commitments.

Better ability of the company to meet its cash commitments

No change in company's potential regarding the debt component in its capital structure.

Company's potential to reduce the debt component in its capital structure

✅ Correct Option: 2

DSCR compares cash profits available for debt servicing with interest and preference dividend obligations. A higher DSCR indicates better ability to meet cash commitments and thereby increases the company's potential to use more debt. Hence it shows better ability of the company to meet its cash commitments.

2026: 6 June Shift 1

Financial Planning aims at enabling the company to tackle the ________ in respect of the availability and timing of the funds and helps in smooth functioning of an organisation.

2025: 13 May Shift 1

What is the primary goal of financial management?

2026: 21 May Shift 1

A decision to raise funds for ₹ 80,00,000 either from 10% Debenture or Equity shares is a:

2026: 21 May Shift 1

The decision involving the choice between the right mix of equity financing and debt financing is:

2025: 29 May Shift 2

The number of times earnings before interest and taxes of a company covers the interest obligation is indicated by which ratio?

2026: 11 May Shift 2

The correct factor affecting Dividend decision is:

A higher Debt Service Coverage Ratio (DSCR) indicates

Solution

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