What does CAFDS mean in ACCOUNTING
CAFDS stands for Cash Available For Debt Service. It is a financial statement that records the total cash available to cover the debt servicing costs of an organization or individual. This includes all income and disbursement related to debt service such as interest payments, principal repayment, and any other related expenses.
CAFDS meaning in Accounting in Business
CAFDS mostly used in an acronym Accounting in Category Business that means Cash Available For Debt Service
Shorthand: CAFDS,
Full Form: Cash Available For Debt Service
For more information of "Cash Available For Debt Service", see the section below.
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Essential Questions and Answers on Cash Available For Debt Service in "BUSINESS»ACCOUNTING"
What does CAFDS measure?
CAFDS measures the total cash available to cover the debt service costs of an organization or individual.
How is CAFDS calculated?
CAFDS is calculated by subtracting all debt servicing-related expenditures from all income related to debt service.
What can CAFDS be used for?
CAFDS can be used to gain insights into a company's future ability to meet its debt obligations. It can also be used as collateral when taking out loans.
What are some examples of debt servicing-related expenditures?
Examples of such expenditures include interest payments, principal repayment, loan fees, and any other associated costs related to managing debt.
Can I use CAFDS to predict future earnings capacity?
It is possible to use CAFDS as an indicator of a firm's potential earnings capacity in the future if it continues on its current trajectory with its existing debts. However, it cannot be used as an exact predictor due to many unpredictable factors involved in forecasting future performance.
Final Words:
Overall, CAFDS is an important financial measure that provides a snapshot of an organization or individual's available cash for servicing their current debts. By understanding how this figure is calculated and what it measures, it can help inform decisions about borrowing money and ensure that current debts are managed responsibly in order to maximize financial stability in the long term.