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DSCR Calculator (Debt Service Coverage Ratio)

LAST UPDATE: August 25th, 2018

Calculator

What is DSCR (Debt Service Coverage Ratio)?

DSCR is a measurement of cash flow available to settle interest costs.

Formula

DSCR = Net Operating Income / Debt Service

Net Operating Income = Net Income + Depreciation + Interest Expense + Other Non-cash Items

Debt Service = Principal Repayment + Interest Payments + Lease Payments

Example

A business has net income of $2,500, depreciation of $3,000, interest expense of $3,000, non-cash items of $1,250, principal repayment of $500, interest payments of $1,250, and lease payments of $750.

Net Operating Income = $2,500 + $3,000 + $3,000 + $1,250 = $9,750

Debt Service = $500 + $1,250 + $750 = $2,500

DSCR = $9.750 / $2,500 = 3.900

Therefore, this business has a DSCR of 3.900.

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