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Definition of Debt Service Coverage Ratio (DSCR)

Definition: What is the Debt Service Coverage Ratio (DSCR)?

Debt Service Coverage Ratio is used to compare the available cash of the company with current interest, funds, and sinking funds obligation of the company.

Definition of Debt Service Coverage Ratio (DSCR)

For investors as well as for creditor this ratio is very important but creditors use this ratio mostly. Creditor not only interest in the cash and cash flow of the company.

They also interest to know about the debt which company have to pay and cash of the company to pay the present and future debt of the company.

Unlike the debt ratio, debt service coverage ratio tells more about all the expenses of the company which not shown by the debt ratio. You can learn about Debt Service Coverage Ratio Formula (DSCR).

Financial Ratio is a forum where you will learn about all ratios definitions and formulas.

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