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The debt service coverage ratio ( DSCR ), also known as "debt coverage ratio" (DCR), is a financial metric used to assess an entity's ability to generate enough cash to cover its debt service obligations, such as interest, principal, and lease payments. The DSCR is calculated by dividing the operating income by the total amount of debt service due.
Debt-service coverage ratio (DSCR) looks at a company's cash flow versus its debts. The ratio is used when gauging a business's ability to pay off current loans and take on future financing.
Times interest earned (TIE) or interest coverage ratio is a measure of a company's ability to honor its debt payments. It may be calculated as either EBIT or EBITDA divided by the total interest expense . When the interest coverage ratio is smaller than one, the company is not generating enough cash from its operations EBIT to meet its interest ...
In economics and government finance, a country’s debt service ratio is the ratio of its debt service payments (principal + interest) to its export earnings. [1] A country's international finances are healthier when this ratio is low. For most countries the ratio is between 0 and 20%. In contrast to the debt service coverage ratio, which is ...
Interest coverage ratio, or ICR, is used to evaluate a company’s ability to pay the interest it owes on its debts. There is no generally agreed upon standard for what makes a healthy ICR across ...
Calculate Your Debt-to-Income Ratio. To find out what your debt-to-income ratio is, use a debt-to-income ratio calculator or simply add up your minimum recurring debts — that is, the least ...
Financial ratios are categorized according to the financial aspect of the business which the ratio measures. Liquidity ratios measure the availability of cash to pay debt. [2] Activity ratios measure how quickly a firm converts non-cash assets to cash assets. [3] Debt ratios measure the firm's ability to repay long-term debt. [4]
A typical measurement of repayment ability is the debt service coverage ratio or DSCR. A credit analyst at a bank will measure the cash generated by a business (before interest expense and excluding depreciation and any other non-cash or extraordinary expenses).
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