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Debt Coverage

Debt Coverage

  • Term

    Main definition

  • Debt Coverage

    A measurement of a borrowing company's ability to pay debt. An excess of income, EBITDA or a similar measure as compared with the borrowing company's debt service expense during the same period. Debt coverage indicates a positive excess of income, indicative of the borrowing company having the ability to repay the debt.  Also called the Debt Service Ratio or the Debt Service Coverage Ratio.

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