DebtService
Debt service is the cash required to cover the repayment of interest and principal on outstanding debt during a given period, typically one year. It comprises scheduled interest payments and principal amortization. In some loan structures, it may also include mandatory deposits to a sinking fund or other features that are legally bound to reduce debt.
For analysis, debt service is compared against cash flow. The debt service coverage ratio (DSCR) is a
Debt service decisions affect liquidity, budgeting, and credit terms. In governments, debt service is a recurring