Question

India's debt service payment ratio is lower than corresponding ratio for many developing countries like _______.

• A. Argentina and Indonesia
• B. Mexico
• C. Turkey
• D. All of above

Answer 1

Answer: (D)

All of above

Debt service payment ratio is nothing but the cash flow available to pay the debt obligations. The ratio states net operating income as a multiple of debt obligations due within one year, including interest, principal, sinking funds and lease payments. The debt service payment ratio of India is lower than Argentina and Indonesia, Mexico and Turkey because India's capacity to pay debt obligation is low.