Debt-service coverage ratio

(redirected from Debt-Service Ratio)

Debt-service coverage ratio

Earnings before interest and income taxes, divided by interest expense plus the quantity of principal repayments divided by one minus the tax rate.

Debt-Service Coverage Ratio

1. In investment real estate, the ratio of annual net operating income on a piece of investment property to its annual debt service. Banks use the DSCR to help determine whether to make or refinance loans for investment property. A DSCR equal to or greater than 1 indicates that the debtor is able to service the debt on the income from the investment property. In personal finance, banks usually require a DSCR of at least 1 to make such a loan, while they generally expect a ratio of 1.2 for commercial projects.

2. In government finance, the ratio of annual export earnings to its annual debt service on external debt.
References in periodicals archive ?
While the debt-service ratio for household debt in the first quarter of 2011, at 3.
On the other hand, the debt-service ratio is significantly less likely to be related to a company's current credit rating.
The state's debt-service ratio, which Davis reduced from 4 percent to 3 percent, will have more than doubled -- and by the following year nearly tripled.
However, the household debt-service ratio (the ratio of required payments on outstanding mortgage and consumer debt to disposable income) has moderated over the past couple of years but remains high compared to levels over the past 24 years.
But Thailand's debt-service ratio -- annual interest and principal payments as a percentage of export earnings -- rose to 19.
The purpose of this paper is to determine whether the debt-service ratio is of independent help in predicting future spending growth and, if so, to interpret why this might occur.
With projected donor financial support, Burkina Faso's real growth rate would improve, the debt-service ratio would fall and the foreign-reserves position would strengthen.
debt-GNP and debt-service ratio, reflect the inter-play of several economic as well as non-economic factors.
The state's debt-service ratio - its comparison of general-fund debt payment to state revenue - is currently about 4.
8) On the other hand, the debt-service ratio makes no allowance for the possible tax deductibility of some credit payments, particularly mortgage payments.
Such indebtedness, combined with the decline in official export earnings, resulted in a debt-service ratio of almost 100% in 1992/93, which put a tremendous strain on the balance of payments.
With that recovery, and its rising capacity to export oil and gas, Qatar's current-account deficit is expected to continue declining, and its debt-service ratio is expected to decline steadily after peaking next year.