Overview

This Debt Service Coverage Ratio (DCSR) Template includes a debt schedule and income statement for a sample calculation of the debt service coverage ratio.

This Debt Service Coverage Ratio (DCSR) Template can be built upon to clearly present the important items of an income statement as well as the debt schedule to calculate the Debt Service Coverage Ratio. The ratio measures the ability of a company to pay its debt obligations using its operating income. DSCR is used to look at how solvent a company is, and how healthy is the current level of debt for the company. There are two formulas that can be used to calculate the debt service coverage ratio:

 

DSCR = EBITDA / (Interest + Principle)

or

DSCR = (EBITDA- Capex) / (Interest + Principle)

 

Where:

  • EBITDA = Earnings Before Interest, Tax, Depreciation, and Amortization
  • Principal = the total loan amount of short-term and long-term borrowings
  • Interest = the interest payable on any borrowings
  • Capex = Capital Expenditure
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