A financial capability ratio that measures the degree to which the annual budget is loaded with disbursements to pay off long-term debt is:
A) Revenue dispersion.
B) Debt service load.
C) Financing margin-bonded debt per capita.
D) Financing margin-legal debt limit.

Question

Quizplus · Accepted Answer

Debt service load is a financial capability ratio that measures the proportion of the annual budget that goes towards paying off long-term debt. It is calculated by dividing the total annual debt payments (principal and interest) by the total annual budget. This ratio indicates the extent to which debt service obligations are absorbing resources that could have been used for other purposes, such as operations or investments.

A Financial Capability Ratio That Measures the Degree to Which