The Total Debt Service (TDS) formula is an essential part of understanding foreign exchange (forex) markets. It is used to measure the total amount of interest paid for a loan as a percentage of total income. The TDS formula takes into account the current market rate of interest, the length of time the loan is being made for, and the amount of income paid.The TDS formula is important to understand because it can show the level of financial risk associated with a loan. As a borrower, understanding this formula can help keep debt levels in check and ensure that payments are made on time. By keeping the TDS formula in mind, forex traders are better able to evaluate debt levels and potential risks associated with various loan options.
The DSCR (Debt Service Coverage Ratio) formula is a key tool used in forex trading. This formula is used by investors to gauge loan stability, and ensure adequate cash flow to cover debt repayments. The DSCR formula is calculated by dividing a company’s annual cash flow by its total debt repayments, including both principal and interest payments. A lower DSCR score indicates more difficulty in paying back the debt while a higher ratio means a company is in better situation to pay its debt. As such, the DSCR formula is an important factor of a company’s creditworthiness and should be considered when deciding to invest.