Debt Service Coverage Ratio (DSCR)
A ratio measuring a company's ability to service its debt obligations from operating cash flow — frequently a loan covenant a lender monitors.
Related terms
- Cut-off Testing
Verifying that transactions are recorded in the period they actually occurred in, not an adjacent one — the classic question for revenue, purchases and inventory around a year end.
- Data Analytics in Audit
Using analysis of large datasets — often the full population rather than a sample — to identify patterns, outliers and anomalies that direct audit attention.
- Debtors Confirmation
A direct request to a customer to confirm their outstanding balance, used as external evidence for receivables.
- Detection Risk
The risk that the procedures performed by the auditor will not detect a misstatement that exists and could be material.
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