Debt capacity

Debt capacity,

Definition of Debt capacity:

  1. Assessment of the amount of debt an individual or firm can repay in a timely manner (from available means or resources) without jeopardizing its financial viability.

  2. Total amount of debt a firm can incur, as restricted by the covenants of a loan agreement, or by the firms articles of association (or articles of incorporation).

Meaning of Debt capacity & Debt capacity Definition