DSCR
Business & Finance abbreviation · Finance
| Stands for | Debt service coverage ratio |
|---|---|
| Categories | Business & Finance |
DSCR stands for Debt service coverage ratio, a finance abbreviation.
Ratio of cash flow available for debt payments to the required principal and interest payments over a period. Lenders use it to judge whether a borrower, property or project can comfortably service its debt.
Example: The bank requires a minimum DSCR of 1.25x, meaning net operating income must exceed annual loan payments by 25 percent.
Usage notes
In commercial real estate, DSCR equals net operating income divided by annual debt service, and many lenders look for roughly 1.20x to 1.35x. In project finance, loan covenants often set lock-up and default thresholds based on DSCR. A ratio below 1.0x means cash flow does not cover the payments.
Related abbreviations
More finance abbreviations
- DCF – Discounted cash flow
- DCM – Debt capital markets
- DD – Due diligence
- DIO – Days inventory outstanding
- DPI – Distributions to paid-in capital
- DPO – Days payable outstanding
- DSO – Days sales outstanding
- EAR – Effective annual rate
- ECM – Equity capital markets
- ERP – Equity risk premium
- ESOP – Employee stock ownership plan
- EV – Enterprise value