Fixed Income
Debt-Service Coverage Ratio
Definition
What is Debt-Service Coverage Ratio?
Cash flow available for debt service divided by required interest and principalThe original amount of money invested or lent, excluding later returns. payments.
Example in practice
How This Looks in Practice
A project generating ₦150 million against ₦100 million of debt service has a 1.5 coverage ratio.
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Related Terms
Fixed Income
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.