Definition
The Debt Service Coverage Ratio (DSCR) measures a company�s ability to cover its debt obligations with its operating income. It is calculated as: DSCR = Total�Debt�Service/Net�Operating�Income
Related Services
Financial analysis, credit risk assessment, and corporate finance advisory help businesses optimize their DSCR for better loan eligibility.
Problem and Application
A low DSCR indicates financial distress and difficulty in repaying loans. Lenders use DSCR to assess borrower risk before approving credit.
Conclusion
Maintaining a healthy DSCR is crucial for securing financing and ensuring long-term financial stability. Companies should optimize revenue and manage debt obligations.
