Debt Service Coverage Ratio Calculator

Debt service coverage ratio (DSCR) = net operating income (NOI) / total debt service. Defaults: 125 of net operating income (NOI) against 100 of total debt service gives 1.25x. Lenders commonly want DSCR at 1.20-1.25x or higher before approving a loan.

Debt service coverage ratio (DSCR) is conventionally quoted as a multiple (like 1.25x) rather than a percentage, since that is how lenders and analysts read it on financial statements. The percent version is shown too, for reference.

Use whatever total debt service figure matches the period or balance sheet date you are analyzing, and make sure net operating income (NOI) covers the same period so the ratio is apples-to-apples.

Generally yes for debt service coverage ratio (dscr) -- more cushion is safer. But an unusually high ratio can also mean a company is sitting on idle capital instead of deploying it, so compare against industry norms rather than assuming bigger is always better.