Debt Service Coverage Ratio (DSCR) Calculator

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The Debt Service Coverage Ratio (DSCR) measures a company's available cash flow to pay current debt obligations. Calculated as DSCR = Net Operating Income (NOI) ÷ Total Debt Service (Principal + Interest), a ratio above 1.25x represents institutional creditworthiness and refinancing capability.

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Calculation Direction:
Operating Cash Flow & Debt Inputs
Debt Service Coverage Ratio Optimal (≥1.35x)
Net Operating Income vs. Annual Debt Service Visual
Net Operating Income (57%) Debt Service Coverage (43%)
Base Forecast Scenario (70%) Operating Sensitivity Spread (30%)
1.50x Ratio
Total Debt Service $800,000
Surplus Cash Flow $400,000
Max Debt Capacity $960,000
Debt Headroom $160,000

5-Year Debt Service Waterfall Projection

Numeric columns rendered with tabular-nums
Projection Year NOI ($) Principal ($) Interest ($) Total Debt Service ($) DSCR (x) Surplus Cash ($)

🎓 LEARN — Debt Service Coverage Ratio Fundamentals

DSCR measures a business or real estate property's cash flow solvency relative to its annual debt obligations.

DSCR = Net Operating Income (NOI) ÷ Total Debt Service

Total Debt Service = Annual Principal Repayments + Annual Interest Expense

Two Sector Worked Examples

Example 1: Commercial Real Estate

Multi-Family Apartment Complex

  • NOI: $1,200,000 | Principal: $600,000 | Interest: $200,000
  • Total Debt Service = $800,000
  • DSCR = $1,200,000 ÷ $800,000 = 1.50x (Optimal)
Example 2: Corporate LBO Deal

Leveraged Buyout Portfolio Company

  • NOI: $5,000,000 | Debt Service: $4,166,667
  • DSCR = $5,000,000 ÷ $4,166,667 = 1.20x (Tight Covenant)

Glossary of Credit & Coverage Terms

Debt Service Coverage Ratio (DSCR)

Ratio of operating cash flow available to service principal and interest obligations.

Net Operating Income (NOI)

Total operating revenues minus necessary operating expenses (before tax & interest).

Principal Repayment

Annual amortized loan principal returned to the lender.

Interest Expense

Annual borrowing cost paid on outstanding debt balances.

Total Debt Service

Combined sum of annual principal and interest payments.

Debt Headroom

Additional annual debt service capacity before reaching lender covenant limits.

Debt Covenant

Legally binding loan clause requiring minimum ongoing DSCR maintenance.

Refinancing Capacity

Maximum loan amount supported by current property or corporate NOI.

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Internal Operational Mesh

FP&A & Valuation Hub → Working Capital & CCC Calculator ★ → Depreciation Schedule Generator ★ → Break-Even Point Calculator → Cost of Goods Sold (COGS) Calc → Days Sales Outstanding (DSO) Calc → Days Payable Outstanding (DPO) Calc → Days Inventory Outstanding (DIO) Calc → Fully Burdened Labor Rate → Economic Order Quantity (EOQ) →