Tag: debt capacity

Higher Interest Rates Reduce Out of Home Debt Capacity

The Fed raised interest rates another half percent yesterday to combat inflation.  The prime rate, which is the lending index for most private out of home companies, has more than doubled over the past year as you can see below. The Federal Reserve signaled yesterday that there may be one […]

Why 5 times cashflow is your debt capacity.

On Friday Insider wrote that debt for an out of home advertising company should not exceed 5 times cashflow (earnings before interest, depreciation and amortization) or 3 times revenue.  This is the upper limit.  It’s OK to operate way below this if your risk tolerance is less.  This analysis is […]