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Debt Coverage Ratio Formula

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Debt Coverage Ratio is a measure of the cash flow available to pay current debt obligations. Check FAQs

DSCR = \frac{NOI}{DS}

DSCR - Debt Coverage Ratio?NOI - Net Operating Income?DS - Debt Service?

Debt Coverage Ratio Example

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Here is how the Debt Coverage Ratio equation looks like with Values.

Here is how the Debt Coverage Ratio equation looks like with Units.

Here is how the Debt Coverage Ratio equation looks like.

2.8571 = \frac{40000}{14000}

2.8571 = \frac{40000}{14000}

2.8571 = \frac{40000}{14000}

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Debt Coverage Ratio Solution

Follow our step by step solution on how to calculate Debt Coverage Ratio?

FIRST Step Consider the formula

DSCR = \frac{NOI}{DS}

Next Step Substitute values of Variables

∴

DSCR = \frac{40000}{14000}

Next Step Prepare to Evaluate

∴

DSCR = \frac{40000}{14000}

Next Step Evaluate

∴

DSCR = 2.85714285714286

LAST Step Rounding Answer

∴

DSCR = 2.8571

Debt Coverage Ratio Formula Elements

Variables

Debt Coverage Ratio

Debt Coverage Ratio is a measure of the cash flow available to pay current debt obligations.

Symbol: DSCR

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Debt Coverage Ratio

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.

Symbol: NOI

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Net Operating Income

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.

Symbol: DS

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Debt Service

Other formulas in Important Formulas of Business category

Go Break-Even Point

BEP = \frac{FC}{CM}

Go Return on Capital Employed

ROCE = (\frac{EBIT}{TA - CL}) \cdot 100

Go Solvency Ratio

SR = \frac{SF \cdot 100}{TA}

Go Economic Order Quantity

EOQ = (\frac{2 \cdot Cf \cdot Demand}{C h}) \cdot (\frac{1}{2})

How to Evaluate Debt Coverage Ratio?

Debt Coverage Ratio evaluator uses Debt Coverage Ratio = Net Operating Income/Debt Service to evaluate the Debt Coverage Ratio, The Debt Coverage Ratio is a measure of the cash flow available to pay current debt obligations. Debt Coverage Ratio is denoted by DSCR symbol.

How to evaluate Debt Coverage Ratio using this online evaluator? To use this online evaluator for Debt Coverage Ratio, enter Net Operating Income (NOI) & Debt Service (DS) and hit the calculate button.

FAQs on Debt Coverage Ratio

What is the formula to find Debt Coverage Ratio?

The formula of Debt Coverage Ratio is expressed as Debt Coverage Ratio = Net Operating Income/Debt Service. Here is an example- 2.857143 = 40000/14000.

How to calculate Debt Coverage Ratio?

With Net Operating Income (NOI) & Debt Service (DS) we can find Debt Coverage Ratio using the formula - Debt Coverage Ratio = Net Operating Income/Debt Service.

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Debt Coverage Ratio Formula

Debt Coverage Ratio Example

Debt Coverage Ratio Solution

Debt Coverage Ratio Formula Elements

Other formulas in Important Formulas of Business category

How to Evaluate Debt Coverage Ratio?

FAQs on Debt Coverage Ratio

Variable Name