Debt service ratio
Encyclopedia
In economics and government finance, debt service ratio is the ratio of debt service payments (principal + interest) of a country to that country’s export earnings. A country's international finances are healthier when this ratio is low. The ratio is between 0 and 20% for most countries.
In contrast to the debt service coverage ratio
, which is calculated as income divided by debt, this ratio is inverse and is calculated as debt service divided by country's income from international trade, i.e. export.
In contrast to the debt service coverage ratio
Debt service coverage ratio
The debt service coverage ratio , also known as "debt coverage ratio," is the ratio of cash available for debt servicing to interest, principal and lease payments. It is a popular benchmark used in the measurement of an entity's ability to produce enough cash to cover its debt payments...
, which is calculated as income divided by debt, this ratio is inverse and is calculated as debt service divided by country's income from international trade, i.e. export.