Best Practices in Achieving Universal Health Coverage: A Scoping Review

The denominator of the formula is the company’s interest expenses, which are the costs of servicing its debt. Companies need earnings to cover interest payments and survive unforeseeable financial hardships. A company’s ability to meet its interest obligations is an aspect of its solvency and an important factor in the return for shareholders. The results of the reviewing the time trend of study publication revealed that most studies (except for 2) were published after announcing the UHC as a national and international policy for countries by the WHO in 2008 (3, 65).

1. Hence, the ability of a bank to disburse loans to companies and individuals reduces.
2. The UHC approach has been highly considered by countries in the last two decades, and these countries have taken many steps with success or failure in the road of achieving UHC.
3. It is a comprehensive measure of solvency (liquidity) as it essentially measures the organization’s actual cash flow instead of the net income.
4. In 2022, global public debt – comprising general government domestic and external debt – reached a record USD 92 trillion.
5. Banks and lenders often use a minimum DSCR ratio as a condition in covenants, and a breach can sometimes be considered an act of default.
6. A well-established utility will likely have consistent production and revenue, particularly due to government regulations.

The borrower could be found to have defaulted on the loan if it does. DSCRs can also help analysts and investors when analyzing a company’s financial strength in addition to helping banks manage their risks. This study provides the comprehensive and clear view of successful interventions performed in most countries at different income levels, which seek to achieve the UHC. Reporting these successful interventions can be a model and guide for other countries to avoid the costs and recurring mistakes. A higher DSCR indicates that an entity has a greater ability to service its debts.

Hence, the ability of a bank to disburse loans to companies and individuals reduces. It can further lead to an economic slowdown, hence reducing the capacity of individuals to avail of loans and the ability of businesses to expand. The solvency ratio measures the company’s cash flow which includes all the depreciation and non-cash expenses against all debt obligations.

The debt coverage ratio for this property would be 1.2 and Mr. Jones would know the property generates 20 percent more than is required to pay the annual mortgage payment. For example, if a property has a debt coverage ratio of less than one, the income that property generates is not enough to cover the mortgage payments and the property’s operating expenses. A property with a debt coverage ratio of .8 only generates enough income to pay for 80 percent of the yearly debt payments.

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2. The solvency ratio measures the company’s cash flow which includes all the depreciation and non-cash expenses against all debt obligations.
3. This is generally considered a good indication of a company’s financial health because it suggests that the company has a significant margin of safety and can comfortably make its interest payments.
4. The numerator of the formula is the EBIT, which is calculated by subtracting a company’s operating expenses from its revenues.
5. The debt-service coverage ratio assesses a company’s ability to meet its minimum principal and interest payments, including sinking fund payments.

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(b) World Bank collaboration that facilitates the preparation and structuring of complex infrastructure Public-Private Partnerships (PPPs) to enable mobilization of private sector and institutional investor capital. (a) Achieving 100% literacy by promoting collaboration between voluntary organizations and government’s education system and local communities. (b) Digital currency will totally replace the physical currency in about two decades. (b) It is a scheme of RBI for reworking the financial structure of big corporate entities facing genuine difficulties.

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Given the importance of achieving UHC for high- and middle-income countries, the number of countries trying to achieve this has increased in the last 2 decades (14, 15). The UHC can be one of the most challenging political processes that require the support of various stakeholders, including health system policymakers (4). Although all countries pursue the same goal of achieving UHC, the path and duration of achieving this goal depend on the structure and resources of the countries as well as the specific effective factors of each country (4). The entity may appear vulnerable and a minor decline in cash flow could render it unable to service its debt if the debt-service coverage ratio is too close to 1.00.

You might think that High Quality Liquid Assets that last only 30 days are probably insufficient for a bank weathering a stress period. Another ratio that the Basel III rules mandate is the Net Stable Funding Ratio (NSFR). As mentioned earlier, the Liquidity Coverage Ratio in banking resulted from the Basel III agreement, which is a series of measures undertaken by the Basel Committee on Bank Supervision (BCBS). This international committee comprises 45 members in 28 jurisdictions across the world. Certain trigger events will occur should Sun Country’s DSCR fall below a specified level.

This is a very conservative metric, as it compares only cash on hand (no other assets) to the interest expense the company has relative to its debt. Therefore, the company would be able to cover its debt service 2x over with its operating income. On the other hand, if a company has a low Interest Coverage Ratio, it means that the company is not generating enough earnings to cover its interest payments. This can lead to financial distress, as the company may struggle to meet its debt obligations and may be at risk of default. A poor interest coverage ratio, such as below one, means the company’s current earnings are insufficient to service its outstanding debt. The chances of a company being able to continue to meet its interest expenses on an ongoing basis are still doubtful even with an interest coverage ratio below 1.5, especially if the company is vulnerable to seasonal or cyclical dips in revenues.

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A smaller company that’s just beginning to generate cash flow might face lower DSCR expectations compared with a mature company that’s already well-established. A DSCR above 1.25 is often considered strong as a general rule, however. Ratios below 1.00 could indicate that the company is facing financial difficulties. The DSCR is a commonly used metric when negotiating loan contracts between companies and banks. A business applying for a line of credit might be obligated to ensure that its DSCR doesn’t dip below 1.25.

As a general rule of thumb, an ideal debt service coverage ratio is 2 or higher. The DSCR is calculated by dividing the operating income by the total amount of debt service due. The debt-service coverage ratio (DSCR) measures a firm’s available cash flow to pay its current debt obligations. The DSCR shows investors and lenders whether a company has enough income to pay its debts. The ratio is calculated by dividing net operating income by debt service, including principal and interest coverage ratio upsc interest.

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Banks and lenders often use a minimum DSCR ratio as a condition in covenants, and a breach can sometimes be considered an act of default. Governments use it to finance their expenditures, to protect and invest in their people, and to pave their way to a better future. However, it can also be a heavy burden, when public debt grows too much or too fast.

There are a lot of solvency ratios that are used to measure the solvency of an organization like; the Interest Coverage ratio, Debt-to-Assets ratio, Equity ratio, and Debt-to-Equity ratio. The interest coverage ratio indicates the number of times that a company’s operating profit will cover the interest it must pay on all debts for a given period. This is expressed as a ratio and is most often computed annually. A good ratio indicates that a company can service the interest on its debts using its earnings or has shown the ability to maintain revenues at a consistent level. A well-established utility will likely have consistent production and revenue, particularly due to government regulations. Even if it has a relatively low ratio, it may reliably cover its interest payments.