Debt Service Coverage Ratio Calculator

✖Net Operating Income is a key financial metric used in real estate investment analysis to evaluate the profitability of income-generating properties.ⓘ Net Operating Income [NOI]			+10% -10%
✖Annual Debt refers to the total amount of debt obligations that a company or individual must pay over the course of a year.ⓘ Annual Debt [AD]			+10% -10%

✖Debt Service Coverage Ratio measures if the income generated by a commercial property is sufficient to fulfill its annual debt burden.ⓘ Debt Service Coverage Ratio [DSCR]

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Formula

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Debt Service Coverage Ratio

Formula

`"DSCR" = "NOI"/"AD"`

Example

`"1.833333"="550000"/"300000"`

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Debt Service Coverage Ratio Solution

STEP 0: Pre-Calculation Summary

Formula Used

Debt Service Coverage Ratio = Net Operating Income/Annual Debt
DSCR = NOI/AD
This formula uses 3 Variables

Variables Used

Debt Service Coverage Ratio - Debt Service Coverage Ratio measures if the income generated by a commercial property is sufficient to fulfill its annual debt burden.
Net Operating Income - Net Operating Income is a key financial metric used in real estate investment analysis to evaluate the profitability of income-generating properties.
Annual Debt - Annual Debt refers to the total amount of debt obligations that a company or individual must pay over the course of a year.

STEP 1: Convert Input(s) to Base Unit

Net Operating Income: 550000 --> No Conversion Required
Annual Debt: 300000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

DSCR = NOI/AD --> 550000/300000

Evaluating ... ...

DSCR = 1.83333333333333

STEP 3: Convert Result to Output's Unit

1.83333333333333 --> No Conversion Required

FINAL ANSWER

1.83333333333333 ≈ 1.833333 <-- Debt Service Coverage Ratio

(Calculation completed in 00.004 seconds)

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Created by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has created this Calculator and 200+ more calculators!

Verified by Aashna

IGNOU (IGNOU), India

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< 16 Debt Management Calculators

Levered Free Cash Flow

Go Levered Free Cash Flow = Net Income+Depreciation and Amortization-Change in Net Working Capital-Capital Expenditure-Net Borrowing

Present Value of Outstanding Balance

Go Present Value of Outstanding Balance = Existing Payment*(1-(1+Rate of Interest per Annum)^(-Frequency of Payments)/Rate of Interest per Annum)

Home Equity Line of Credit

Go Maximum Line of Credit = Maximum Loan to Value Ratio*Appraised Fair Value of Equity-Outstanding Mortgage Balance

Breakeven Occupancy

Go Breakeven Occupancy Ratio = (Total Operating Expenses+Annual Debt Service)/Potential Gross Income

Average Payment Period

Go Average Payment Period = Average Accounts Payable/(Credit Purchases/Number of Days in Period)

Paid-in-Kind Interest

Go Paid-in-Kind Interest = Paid-in-Kind Interest Rate*Beginning PIK Debt Balance

Senior Debt Ratio

Go Senior Debt Ratio = Senior Debt/EBIT and Depreciation and Amortization

Mortgage Refinance Breakeven Point

Go Mortgage Refinance Breakeven Point = Total Loan Costs/Monthly Savings

Debt Service Coverage Ratio

Go Debt Service Coverage Ratio = Net Operating Income/Annual Debt

Mortgage Constant

Go Mortgage Constant = Annual Debt Service/Total Loan Amount

Solvency Risk Ratio

Go Solvency Risk Ratio = Total Assets/Total Long Term Debt

Loan Constant

Go Loan Constant = Annual Debt Service/Total Loan Amount

Debtor Days

Go Debtor Days = (Accounts Receivable/Credit Sales)*365

Annual Debt Service

Go Annual Debt Service = Principal+Interest Amount

Net Debt

Go Net Debt = Gross Debt-Cash and Cash Equivalents

Overhead Rate

Go Overhead Rate = Overhead Costs/Revenue

Debt Service Coverage Ratio Formula

Debt Service Coverage Ratio = Net Operating Income/Annual Debt
DSCR = NOI/AD

What is Debt Service Coverage Ratio?

Debt Service Coverage Ratio provides insight into the company's ability to generate enough operating income to meet its debt servicing requirements, including interest payments and principal repayments. Lenders often use this ratio to assess the creditworthiness of a borrower and determine the risk associated with lending to them.
Here's a breakdown of the components involved in calculating the Debt Service Coverage Ratio:
Net Operating Income (NOI): This represents the company's operating income before deducting interest, taxes, depreciation, and amortization (EBITDA). NOI is a measure of the company's ability to generate income from its core operations.
Debt Service: This refers to the total amount of debt-related payments that a company is obligated to make during a specific period. It includes both interest payments and principal repayments on outstanding debt.

How to Calculate Debt Service Coverage Ratio?

Debt Service Coverage Ratio calculator uses Debt Service Coverage Ratio = Net Operating Income/Annual Debt to calculate the Debt Service Coverage Ratio, The Debt Service Coverage Ratio is a financial metric used by lenders and investors to evaluate the ability of a company to cover its debt obligations. Debt Service Coverage Ratio is denoted by DSCR symbol.

How to calculate Debt Service Coverage Ratio using this online calculator? To use this online calculator for Debt Service Coverage Ratio, enter Net Operating Income (NOI) & Annual Debt (AD) and hit the calculate button. Here is how the Debt Service Coverage Ratio calculation can be explained with given input values -> 1.833333 = 550000/300000.

FAQ

What is Debt Service Coverage Ratio?

The Debt Service Coverage Ratio is a financial metric used by lenders and investors to evaluate the ability of a company to cover its debt obligations and is represented as DSCR = NOI/AD or Debt Service Coverage Ratio = Net Operating Income/Annual Debt. Net Operating Income is a key financial metric used in real estate investment analysis to evaluate the profitability of income-generating properties & Annual Debt refers to the total amount of debt obligations that a company or individual must pay over the course of a year.

How to calculate Debt Service Coverage Ratio?

The Debt Service Coverage Ratio is a financial metric used by lenders and investors to evaluate the ability of a company to cover its debt obligations is calculated using Debt Service Coverage Ratio = Net Operating Income/Annual Debt. To calculate Debt Service Coverage Ratio, you need Net Operating Income (NOI) & Annual Debt (AD). With our tool, you need to enter the respective value for Net Operating Income & Annual Debt 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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