The debt service coverage ratio (DSCR) is a financial metric used to assess an organization's ability to pay its debt obligations, calculated by dividing its net operating income by its total debt service. This ratio indicates how well an organization can cover its debt payments with its income, providing insights into financial health and stability. A higher DSCR suggests a stronger capacity to meet debt obligations, which is crucial for maintaining investor confidence and securing funding in the context of financial management and budgeting.
congrats on reading the definition of debt service coverage ratio. now let's actually learn it.