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English definition of “debt coverage ratio”

debt coverage ratio

noun [C]
 
 
(abbreviation DCR, also debt-service coverage ratio, also debt service ratio)
FINANCE a measurement used to decide whether a person, company, or country can afford to pay back a loan, calculated by dividing the income that is available by the total amount of payments owed each year for the loan: A debt coverage ratio of less than 1 indicates that there is not enough cash flow to pay the property's expenses and mortgage payments.
(Definition of debt coverage ratio from the Cambridge Business English Dictionary © Cambridge University Press)
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