[{"@context":"http:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/wiki.edu.vn\/en\/debt-service-coverage-ratio-wikipedia\/#BlogPosting","mainEntityOfPage":"https:\/\/wiki.edu.vn\/en\/debt-service-coverage-ratio-wikipedia\/","headline":"Debt service coverage ratio – Wikipedia","name":"Debt service coverage ratio – Wikipedia","description":"before-content-x4 Financial metric after-content-x4 The debt service coverage ratio (DSCR), known as “debt coverage ratio” (DCR), is a financial metric","datePublished":"2014-01-07","dateModified":"2014-01-07","author":{"@type":"Person","@id":"https:\/\/wiki.edu.vn\/en\/author\/lordneo\/#Person","name":"lordneo","url":"https:\/\/wiki.edu.vn\/en\/author\/lordneo\/","image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/cd810e53c1408c38cc766bc14e7ce26a?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/cd810e53c1408c38cc766bc14e7ce26a?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"Enzyklop\u00e4die","logo":{"@type":"ImageObject","@id":"https:\/\/wiki.edu.vn\/wiki4\/wp-content\/uploads\/2023\/08\/download.jpg","url":"https:\/\/wiki.edu.vn\/wiki4\/wp-content\/uploads\/2023\/08\/download.jpg","width":600,"height":60}},"image":{"@type":"ImageObject","@id":"https:\/\/wiki.edu.vn\/wiki4\/wp-content\/uploads\/2023\/08\/download.jpg","url":"https:\/\/wiki.edu.vn\/wiki4\/wp-content\/uploads\/2023\/08\/download.jpg","width":100,"height":100},"url":"https:\/\/wiki.edu.vn\/en\/debt-service-coverage-ratio-wikipedia\/","wordCount":2483,"articleBody":"     (adsbygoogle = window.adsbygoogle || []).push({});before-content-x4Financial metric       (adsbygoogle = window.adsbygoogle || []).push({});after-content-x4The debt service coverage ratio (DSCR), 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. These obligations include interest, principal, and lease payments. The DSCR is calculated by dividing the operating income available for debt service by the total amount of debt service due.The DSCR is widely used as a benchmark to measure the ability of an individual or corporation to meet their debt obligations. A higher DSCR indicates that an entity has a greater ability to service their debts, making it easier for them to obtain loans. Banks and lenders often use a minimum DSCR ratio as a loan condition, and breaching this covenant can sometimes be considered an act of default. It’s an important metric for measuring an entity’s financial health and its ability to meet its debt obligations.       (adsbygoogle = window.adsbygoogle || []).push({});after-content-x4In corporate finance, DSCR refers to the amount of cash flow available to meet annual interest and principal payments on debt, including sinking fund payments.[1]In personal finance, DSCR refers to a ratio used by bank loan officers in determining debt servicing ability.In commercial real estate finance, DSCR is the primary measure to determine if a property will be able to sustain its debt based on cash flow.  In the late 1990s and early 2000s banks typically required a DSCR of at least 1.2,[citation needed] but more aggressive banks would accept lower ratios, a risky practice that contributed to the Financial crisis of 2007\u20132010.  A DSCR over 1 means that (in theory, as calculated to bank standards and assumptions) the entity generates sufficient cash flow to pay its debt obligations. A DSCR below 1.0 indicates that there is not enough cash flow to cover loan payments. In certain industries where non-recourse project finance is used, a Debt Service Reserve Account is commonly used to ensure that loan repayment can be met even in periods with DSCR     (adsbygoogle = window.adsbygoogle || []).push({});after-content-x4"},{"@context":"http:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"https:\/\/wiki.edu.vn\/en\/#breadcrumbitem","name":"Enzyklop\u00e4die"}},{"@type":"ListItem","position":2,"item":{"@id":"https:\/\/wiki.edu.vn\/en\/debt-service-coverage-ratio-wikipedia\/#breadcrumbitem","name":"Debt service coverage ratio – Wikipedia"}}]}]