debt coverage ratio Meaning in the Cambridge English Dictionary Cambridge dictionaries logo

Meaning of “debt coverage ratio” in the English Dictionary

"debt coverage ratio" in Business English

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debt coverage rationoun [C]

uk   us   (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 ​totalamount of ​paymentsowed each ​year for the ​loan: A ​debtcoverageratio of less than 1 ​indicates that there is not enough ​cashflow to ​pay the property's ​expenses and ​mortgagepayments.
(Definition of debt coverage ratio from the Cambridge Business English Dictionary © Cambridge University Press)
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