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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.
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.
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%.
[1]: 81 A debt instrument is a financial claim that requires payment of interest and/or principal by the debtor to the creditor in the future. Examples include debt securities (such as bonds and bills), loans, and government employee pension obligations. [1]: 207 Net debt equals gross debt minus financial assets that are debt instruments.
With debt settlement, you or a third-party service negotiates with your creditors to settle your debt for less than you owe. A typical settlement might be 50% of the original debt amount.
Debt management and debt consolidation are two widely used strategies for helping individuals manage excessive debt and regain financial stability. Debt Management vs. Debt Consolidation: Which is ...
The debt service coverage ratio is the ratio of income available to the amount of debt service due (including both interest and principal amortization, if any). The higher the debt service coverage ratio, the more income is available to pay debt service, and the easier and lower-cost it will be for a borrower to obtain financing.
Good debt vs. bad debt. Good debt and bad debt are distinguished by whether the cost being financed could increase in value. Good debt. Mortgage. School loan. Real estate loan. Business loan.