Q: Why is the 2017 debt amount used instead of the 2018 amount?
A: The 2017 current maturities of long-term debt are due and payable in 2018. Therefore, this amount, plus 2018 interest expense, represents the 2018 interest-bearing debt service.
The 2018 current maturities of long-term debt will not be due and payable until 2019. As a result, it becomes a component of 2019 interest-bearing debt service rather than a component of 2018 interest-bearing debt service.
Course overview: Non-Financial Red Flags, Cash Flow and Second Necessary Condition for Business Success