Debt service coverage ratio: operating income divided by total debt service.
debt service coverage ratio
How to use this tool
Type net operating income for the period.
Type principal and interest due in the same period.
Income divided by total debt service is the ratio.
Lower NOI to see how much cushion you really have.
Formula & worked example
Worked example: net operating income $120,000, principal $60,000 + interest $20,000 = $80,000 debt service. DSCR = $120,000 / $80,000 = 1.50x. Cash left after debt service = $40,000.
Limitations — read this before you rely on it
Lenders define NOI and debt service differently (some use EBITDA, some include leases, taxes or reserves, and some annualise short periods). This calculator uses the figures you enter; a lender's DSCR for the same business may differ.
Frequently asked questions
How many times operating income covers debt payments. DSCR 1.5x means income is one and a half times the payments due.
Often 1.20x to 1.25x minimum for commercial property and business loans, but it varies by lender, sector and loan type.
No. This is a calculator from the numbers you enter. Tax, legal and investment decisions depend on your full circumstances, so check with a qualified professional for real decisions.
As accurate as the inputs and the stated formula. It is a model with simplifications listed in the limitations; try a range of inputs rather than trusting one figure.
Yes for the maths, which is currency-neutral unless a jurisdiction is stated. Tax rules, thresholds and market conventions differ by country, so check local rules where they matter.