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Earnings before interest, taxes, depreciation and amortization (EBITDA) to Debt Service measures a firm’s ability to meet loan payments by cash flow from operations, used to evaluate creditworthiness.

Desired Comparison to Industry Average
Generally, greater than, or equal to, the industry average.

If Quick Ratio is Above Industry Average
Indicates ability of a firm to service principal repayment and is an
indicator of additional debt capacity (since cash flow is the primary source of debt retirement). Indicates that a borrower would have little difficulty in meeting the obligations of a loan.

If Quick Ratio is Below Industry Average
Indicates lack of ability of a firm to service debt repayment and is an indicator of additional debt capacity.