To find tax = (NOI - dep - interest exp) tax
CFAT = NOI - debt service - tax
Is debt service and intest exp the same?
Please add some comments
To find tax = (NOI - dep - interest exp) tax
CFAT = NOI - debt service - tax
Is debt service and intest exp the same?
Please add some comments
Nope. Debt service is ur entire payment including principle.
Typically, debt service = principal payments + interest expense. It makes sense as it is a cash expense.
Whereas, in order to find tax, principal payments are not deductible. Therefore it is strictly interest expense in this case.