What Is a Debt Ceiling?
The debt ceiling refers to the maximum debt carrying capacity of a particular institution under normal operating conditions. According to the income and expenditure ratio, the remaining debt after deducting the inherent expenditure part is the maximum debt bearing capacity. The definition of the remaining approval is incomplete, but when the debt is greater than the inherent assets, and the total operating cycle income cannot maintain debt repayment and sustainable operation, it will no longer enjoy the autonomous rights of assets.
Debt ceiling
Right!
- Chinese name
- Debt ceiling
- Foreign name
- debt ceiling / debtcap
- Meaning
- Maximum debt carrying capacity under normal operations
- Involved
- debt
- The debt ceiling refers to the maximum debt carrying capacity of a particular institution under normal operating conditions. According to the income and expenditure ratio, the remaining debt after deducting the inherent expenditure part is the maximum debt bearing capacity. The definition of the remaining approval is incomplete, but when the debt is greater than the inherent assets, and the total operating cycle income cannot maintain debt repayment and sustainable operation, it will no longer enjoy the autonomous rights of assets.
Cap definition
- 1. Does not affect the debt ceiling under the normal operation of the institution;
- 2. The debt ceiling that affects the operation of the institution is not fatal;
- 3, the ultimate or fatal bottom line.
- In the first case, funds can be obtained through the pledge or borrowing of some inherent assets without changing the overall operating conditions; in the second case, the principle of the lifting of the ban on the sale of assets is used to reduce the main body's expenditure agency, and Obtaining funds in a way to maintain the stability of the entity; the upper limit in the third case is a risky investment, a limit operation of debt exceeding a value of the asset. It is difficult to guarantee the entity without accident, and the overall stability is almost impossible to maintain. Under unexpected circumstances, it almost collapsed completely, lost almost all of its inherent authority, and may even have a small amount of debt.