How many times a borrower's cash flow covers its term loan repayments and interest.
DSCR = (net profit after tax + depreciation + interest on the term loan) / (term loan instalments + interest on the term loan), usually worked out year by year over the loan period. A ratio below 1 means the cash flow does not cover that year's repayments. Each bank's credit policy sets the minimum average it accepts for a term loan.
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