Debt service coverage ratio (DSCR) measures your business’s debt obligations against its cash flow, and indicates your business’s ability to cover its existing debt obligations.

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.

Reviewed by David KindnessReviewed by David Kindness The debt service coverage ratio (DSCR) is used in corporate finance to measure the amount of a company’s cash flow available to pay its ...

Learn how to use the debt-service coverage ratio to determine if a company is able to pay its loans.

What is an ideal debt-equity ratio? The ideal debt equity ratio varies from industry to industry, but it is expected that the ratio does not breach the level of 2.

Why Interest Coverage Ratio? The interest coverage ratio is used to determine how effectively a company can pay the interest charges on its debt.

The debt service coverage ratio is a very important factor when it comes to commercial real estate.

DSCR Loan Calculator Use our free debt service coverage ratio calculator to evaluate a real estate investment opportunity or monitor your business's financial health.

How to calculate debt-service coverage ratio There are two main components in how to calculate DSCR: a company’s annual net operating income and its annual debt service.

The debt service coverage ratio (DSCR) is used to measure a company’s cash flow available to pay current debt. Learn how to calculate the DSCR in Excel.

An interest coverage ratio lower than 1.0 implies that the company is unable to fulfill its interest obligations and could default on repaying debt.