For owner-operated borrowers, which of the following statements is true with respect to understanding management compensation when calculating debt service coverage?

The analyst must adjust EBITDA for any drawings considered non-discretionary. Removing these dividends will increase the debt service coverage ratio.

The analyst must adjust EBITDA for any drawings considered non-discretionary. Removing these dividends will reduce the debt service coverage ratio.

A decrease in a shareholder loan asset will have a negative impact on a borrowers debt service coverage ratio.

Owner-operators should be permitted to draw funds out of their business to cover personal debt obligations without it impacting the business' financial ratios.