Debt ratios measure

Debt ratios measure the company's ability to pay its commitments to long-term debt. They are used to calculate the financial leverage of the company. Leverage refers to the amount of borrowed money to maintain the stable / stable organization. Debt ratio is a ratio that indicates the percentage of the assets of a company that provided through debt. Companies try to maintain this ratio is as low as possible, as a proportion of the higher debt means there is an increased risk associated with its operation.

The debt service coverage ratio, which is abbreviated as DSCR, measures a company's ability to perform their regular duties. DSCR is the ratio of cash flow available for annual sales to pay debt service to total debt.

Prudent investors always avoid being leveraged with debt. Therefore, in most of our projects to raise more capital through private investors. Thus, we can create a safety margin. We also found that greater equity can be more competitive in the market with our rental rates. Greater equity, helps us to increase our occupancy rate, when all other competitors leverage can not afford to match our rates.

The DSCR is also used for approving residential mortgage loans and mortgage refinancing. Finally, the ICSD is used in corporate finance, as a measure of a company's ability to cover total debt service annually, including interest and current portion of long-term debt.