Debt-Service Coverage Ratio: A Useful Financial Measurement for Assessing Future Debt Recovery
Debt RR
OCTOBER 13, 2019
This ratio is the safest and most conservative measure to ensure debt repayments because net DSCR leaves out non-cash operating expenses such as depreciation that could be potential funding sources for debt service. However, it may be too rigid to use net DSCR alone when examining an entity’s creditworthiness. DSCR for B2C.
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