MihsabaHow to use
Calculate DSCR from income available for debt service and total debt-service payments for the same period.
- Enter Income available for debt service.
- Enter Total debt service.
- Calculate, then review the metric definition and comparison limits.
How it is calculated
Example
Income of 180,000 and debt service of 120,000 give DSCR of 1.5 and a 60,000 cushion before other items.
Important notes
The numerator definition can vary by loan and lender. Use the definition required by the financing agreement when testing a covenant.
Worked examples and interpreting results
Income of 180,000 and debt service of 120,000 give DSCR of 1.5 and a 60,000 cushion before other items.
| Case | Calculation | Result |
|---|---|---|
| DSCR | 180000 ÷ 120000 | 1.5 |
| Cushion | 180000 − 120000 | 60,000 |
How to check the result
The numerator definition can vary by loan and lender. Use the definition required by the financing agreement when testing a covenant.
Frequently asked questions
Is DSCR the same as interest coverage?
No. Interest coverage usually compares EBIT with interest only; DSCR compares a defined income measure with total debt service.
Should the inputs use the same period?
Yes. Use figures from the same reporting period and accounting definition so balances and flows remain comparable.
Is the result enough for a decision?
No. The metric summarizes a numerical relationship; compare it with company history, industry context, and accounting or operating policies.