DT asked 6 months ago
Hi,
I\'m on Debt Servicing Ratio chapter, and wanted to get some clarity for Singapore Airlines:
Is my understanding correct: Singapore Airlines technically is \"negative\" on debt servicing ratio, Interest Income is able to cover Interest Expenses. So high positive cashflow FY2023/24?
Net Interest Expense for FY 2023/2024 = 424.5 + (-631.7) = -207.2
Net Operating cashflow = 5,054
Net Interest Expense for FY 2023/2024 = 424.5 + (-631.7) = -207.2
Net Operating cashflow = 5,054
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1 Answers
Rusmin Ang Staff answered 6 months ago
Hi DT,
That's right! That means that SIA is not even servicing the debt but earning extra interest income! So you can move on to the next step. Through this example, I just want to show you guys that not all companies are servicing their debt but there are companies that have more cash than debt.
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