finance
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Debt Service Coverage Ratio
DSCR
Measures how many times a project's cashflow covers its debt service (interest and repayments). A DSCR above 1 means cashflow is sufficient.
Why it matters
Lenders use DSCR to judge whether a project can service its loan. A low DSCR signals higher financing risk.
In Profivo
Profivo models debt service within the cashflow, so you can assess whether your finance structure is sustainable.
Formula
DSCR = Net operating cashflow / Debt service