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Unformatted text preview: ere is a $500,000 drop in Longterm debt between the end of 2008 and 2009 This is possible if D’Leon negotiated with creditors to convert this amount of debt into equity. 5 Comments on EBITDA (2)
Please note that longterm debt due to be retired in the current year is reported in the Balance Sheet as part of “Notes Payable.” This is left out of the EBITDA Coverage Ratio In Brigham and Houston over a series of editions. • They limit principal repayments to “sinking fund” payments. • But given the purpose of the ratio, this seems strange.
its denominator. See next slide: • A more useful ratio would include “Change in Notes Payable” in 6 EBITDA Coverage Ratio incorporat...
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- Spring '09