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Reference.org
Debt service coverage ratio
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<p>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 <a href="/facts/Debt/VDKsvv1q">debt service</a> 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. </p><p>A higher DSCR indicates that an entity has a greater ability to service its debts. Banks and lenders often use a minimum DSCR ratio as a condition in covenants, and a breach can sometimes be considered an act of <a href="/facts/Default_(finance)/tzRGlN51">default</a>. </p>