What can a financial analyst learn from computing a hospital's debt service coverage?
A)the number of times the debt service is covered by the hospital's earnings
B)the excess of the total net assets over the hospital's outstanding long-term debt
C)the number of times the debt service is covered by the hospital's current assets
D)the ratio of the outstanding long-term debt to the current year's debt service

Question

Quizplus · Accepted Answer

Computing a hospital's debt service coverage ratio involves comparing its earnings with the amount of debt it has to service. By doing this, a financial analyst can learn how many times over the hospital can cover its debt service obligations. This is an important measure of the hospital's ability to generate income and pay off its debts.

What Can a Financial Analyst Learn from Computing a Hospital's