Debt Service Coverage Ratio Calculator

Formula

To calculate the Debt Service Coverage Ratio (DSCR):

$DSCR = \frac{NOI}{DS}$

Where:

DSCR is the Debt Service Coverage Ratio
NOI is the net operating income ($)
DS is the debt service ($)

Debt Service Coverage Ratio Definition

The Debt Service Coverage Ratio (DSCR) is a measure used to determine the ability of a company to service its debt with its operating income. It is calculated by dividing the net operating income (NOI) by the debt service (DS). A DSCR of less than 1 indicates that the company does not generate enough income to cover its debt obligations, while a DSCR greater than 1 indicates that the company generates more income than necessary to cover its debt obligations.

Example Calculation 1

Let's assume the following values:

Net Operating Income (NOI) = $120,000
Debt Service (DS) = $100,000

Using the formula:

$DSCR = \frac{120000}{100000} = 1.20$

The Debt Service Coverage Ratio (DSCR) is 1.20.

Example Calculation 2

Let's assume the following values:

Net Operating Income (NOI) = $90,000
Debt Service (DS) = $110,000

Using the formula:

$DSCR = \frac{90000}{110000} \approx 0.82$

The Debt Service Coverage Ratio (DSCR) is approximately 0.82.