Which of the following measures is generally tracked by debt covenants?

Debt covenants are agreements between borrowers and lenders that set specific guidelines for financial metrics to be maintained throughout the life of a loan. These covenants are designed to protect the lender's interests by ensuring that the borrower adheres to certain financial standards, which helps manage the risk of default.

Current ratios are particularly important because they measure a company’s liquidity, indicating its ability to cover short-term liabilities with short-term assets. Lenders often stipulate minimum current ratio requirements to ensure that the borrowing entity remains solvent and can meet its financial obligations. This metric is directly relevant and quantifiable, making it a common covenant.

On the other hand, other measures such as revenue growth, market share, or customer satisfaction can be vital for business performance, but they are not typically tracked by debt covenants. Revenue growth does not provide a comprehensive view of financial health since it only measures sales performance and does not account for costs and liabilities. Market share reflects competitive positioning but has no directly correlated impact on a company’s short-term financial stability. Customer satisfaction can influence long-term business success but is inherently subjective and not as easily quantified in financial terms as the current ratio.