Debt Coverage Ratio Calculator is a tool that calculates how much net operating income a firm can generate compared to the debt payment it has to make in the same period
- Debt Coverage Ratio:
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- What is Debt Coverage Ratio?
- The Debt Coverage Ratio or Debt Service Coverage Ratio (DSCR) is a measure of the cash flow available to pay current debt obligations. It compares the subject net operating income to the proposed mortgage debt service (annual basis).
- Formula
- DSCR = Net operating income / Total debt service
- Example
- A company shows its income statement with an operating income of $200,000. For the same period the debt payment is $35,000. According to the above formula, the company would show a debt coverage ratio of 5.71.
History
- Jun 10, 2018
- Tool Launched
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