PLAIN-LANGUAGE DEFINITION
The annual cost of borrowing, expressed as a percentage of the loan balance. Higher interest rates increase the total cost of the loan and raise your annual debt service.
What to check
Test the assumptions and consider what happens if revenue or costs differ from your plan.
Where this connects to Impresa
You may encounter this concept when reviewing Capital Planning. Start with the underlying inputs and check the applicable reporting period before interpreting the result.
Read the Capital Planning guideA NOTE ON INTERPRETATION
NEXT DEFINITIONCash Drain from Growth ↗Definitions here explain the concept. Accounting treatments, formulas, and industry comparisons may vary. Use your own records and qualified advice for material decisions.