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Debt Coverage Ratio Solution

STEP 0: Pre-Calculation Summary
Formula Used
debt_coverage_ratio = Net Operating Income/Debt Service
DSCR = NOI/DS
This formula uses 2 Variables
Variables Used
Net Operating Income- Net operating income is a calculation used to analyze real estate investments that generate income. It equals all revenue from the property minus all reasonably necessary operating expenses.
Debt Service- Debt service is the cash that is required to cover the repayment of interest and principal on a debt for a particular time period.
STEP 1: Convert Input(s) to Base Unit
Net Operating Income: 40000 --> No Conversion Required
Debt Service: 14000 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
DSCR = NOI/DS --> 40000/14000
Evaluating ... ...
DSCR = 2.85714285714286
STEP 3: Convert Result to Output's Unit
2.85714285714286 --> No Conversion Required
FINAL ANSWER
2.85714285714286 <-- Debt Coverage Ratio
(Calculation completed in 00.016 seconds)
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Debt Coverage Ratio Formula

debt_coverage_ratio = Net Operating Income/Debt Service
DSCR = NOI/DS

How to Calculate Debt Coverage Ratio?

Debt Coverage Ratio calculator uses debt_coverage_ratio = Net Operating Income/Debt Service to calculate the Debt Coverage Ratio, The debt coverage ratio is a measure of the cash flow available to pay current debt obligations. Debt Coverage Ratio and is denoted by DSCR symbol.

How to calculate Debt Coverage Ratio using this online calculator? To use this online calculator for Debt Coverage Ratio, enter Net Operating Income (NOI) and Debt Service (DS) and hit the calculate button. Here is how the Debt Coverage Ratio calculation can be explained with given input values -> 2.857143 = 40000/14000.

FAQ

What is Debt Coverage Ratio?
The debt coverage ratio is a measure of the cash flow available to pay current debt obligations and is represented as DSCR = NOI/DS or debt_coverage_ratio = Net Operating Income/Debt Service. Net operating income is a calculation used to analyze real estate investments that generate income. It equals all revenue from the property minus all reasonably necessary operating expenses and Debt service is the cash that is required to cover the repayment of interest and principal on a debt for a particular time period.
How to calculate Debt Coverage Ratio?
The debt coverage ratio is a measure of the cash flow available to pay current debt obligations is calculated using debt_coverage_ratio = Net Operating Income/Debt Service. To calculate Debt Coverage Ratio, you need Net Operating Income (NOI) and Debt Service (DS). With our tool, you need to enter the respective value for Net Operating Income and Debt Service and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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