The Debt Service Ratio (DSR) is the corporate, government, and personal finance ability to repay its debt that compares income to debt-related obligations. Bankers often calculate this ratio as part of their considerations of whether or not to approve a business loan. A country’s international finances are healthier when this ratio is low, and in personal finance, the DSR is used by bank loan officers to determine income property loans.
Reference Definition by OECD: The Debt Service Ratio (DSR) is the ratio of debt service payments made by or due from a country to that country’s export earnings. The ratio of debt service (interest and principal payments due) during a year, expressed as a percentage of exports (typically of goods and services) for that year. Forward-looking debt-service ratios require some forecast of export earnings. This ratio is considered to be a key indicator of a country’s debt burden.
Related Definitions in the Project: The Commercial Definitions
