The Debt-Service Coverage Ratio (DSCR) is a financial ratio that compares a companys operating income to its debt payments. It is used by investors, lenders, and analysts to assess whether a company has the income to meet its principal and interest obligations. A "good" DSCR depends on the companys industry, competitors, and growth. As a general rule, however, a DSCR above 1.25 is often considered "strong," whereas ratios below 1.00 could indicate that the company is facing financial difficulties. In real estate, a DSCR above 1 is better than a ratio at or below 1 because it indicates a stronger position and ability to repay debts. A DSCR above 2 is generally seen as healthy. It is important to note that different lenders may have different minimum DSCR requirements, and the exact ratio value may vary depending on the context of the analysis.