With our Debt Service Coverage Ratio template, you will be able to determine your business' ability to repay its debt. Use it to make sure that your cash flow is sufficient to meet your business' debt obligations.
What is a Debt-Service Coverage Ratio?
Financial ratios are particularly important for small business owners who seek out financing to grow their business. These ratios help business owners measure the profitability and overall health of a business. The term Debt-Service Coverage Ratio (DSCR), also known as Debt Coverage Ratio (DCR), is used in various financial contexts.
In the small business context, DSCR indicates the cash ratio a business has on hand for servicing its pre-existing debt. Specifically, the debt includes payments on leases, principal, and interest.
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