capacity to meet future obligations from earnings or income.
- Banking.A borrower's capacity to make principal and interest payments from disposable income. Lenders look closely at a credit applicant's current salary and expected future earnings, and at an organization's cash flow from conversion of assets into cash.See also balance sheet ratios five C's of credit qualifying ratio
- Securities, municipal bonds.The issuer's capacity to generate sufficient income from taxes or other sources to meet contractual obligations.
- Finance.The ability to meet debt servicepayments on bonds and other long-term obligations.
Finance:borrower's ability to meet principal and interest payments on long-term obligations.
Industrial relations:ability of an employer, especially a financial organization, to meet a union's financial demands from operating income.
Municipal bonds:issuer's present and future ability to generate enough tax revenue to meet its contractual obligations.
Public policy:charging fees or pricing based on the user's income level.
Taxation:concept that tax rates should vary with levels of wealth or income; for example, the progressive income tax.
Finance: borrower's ability to meet principal and interest payments on long-term obligations out of earnings. Also called ability to service. See also fixed-charge coverage.
Industrial relations: ability of an employer, especially a financial organization to meet a union's financial demands from operating income.
Municipal bonds: issuer's present and future ability to generate enough tax revenue to meet its contractual obligations, taking into account all factors concerned with municipal income and property values.
Taxation: the concept that tax rates should vary with levels of wealth or income; for example, the progressive income tax.
