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Finance & Banking vocabulary · Loans & Credit

Debt-service coverage ratio

Meaning in finance & banking, with examples

nounAdvanced term

In finance & banking, debt-service coverage ratio means: A measure comparing cash or income available for debt service with scheduled principal and interest payments.

In Turkish: borç servisi karşılama oranı

How it is used

Abbreviated DSCR; state the numerator and period because contracts use different calculation definitions.

Example sentences

  1. The debt-service coverage ratio fell when scheduled principal payments increased.

    Larger required payments weaken coverage if available cash is unchanged.

  2. The lender recalculated the debt-service coverage ratio using the covenant's cash-flow definition.

    The contractual definition determines which cash flows count.

Common collocations

  • minimum debt-service coverage ratio
  • DSCR covenant
  • cash flowThe movement of money into and out of a business over a period. Positive cash flow means more money is coming in than going out.
  • covenantA promise in a loan or bond agreement that the borrower will or will not do certain things, such as keeping its debt below a set level.

More terms: Loans & Credit

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This page explains English vocabulary for learners. It is not financial advice.