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 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)