Debt Service Coverage Ratio CalculatorFree online financial calculator — instant results, no sign-up
Measure cash available for debt service relative to scheduled principal and interest.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Debt Service Coverage Ratio Calculator
The Debt Service Coverage Ratio Calculator measures how much annual cash is available to cover scheduled principal and interest payments. It adds those payments to calculate annual debt service, then divides available cash by that total to show debt coverage as a ratio.
- Annual cash available for debt service ($)
- The cash available to pay principal and interest during the year, entered in dollars, with a default of $180,000.
- Annual principal payments ($)
- The scheduled repayment of loan principal during the same year, entered in dollars, with a default of $70,000.
- Annual interest payments ($)
- The scheduled interest payments during the same year, entered in dollars, with a default of $40,000.
Formula and method
D = P + I; DSCR = C / D = C / (P + I), provided D > 0.
- CAnnual cash available for debt service, in dollars.
- PAnnual scheduled principal payments, in dollars.
- IAnnual scheduled interest payments, in dollars.
- DAnnual debt service: total scheduled principal and interest, in dollars.
- DSCRDebt service coverage ratio, a unitless measure of available cash relative to annual debt service.
Add annual principal and interest payments, then divide annual cash available for debt service by the sum. With the default inputs, annual debt service is $70,000 + $40,000 = $110,000.00. The debt service coverage ratio is $180,000 / $110,000 = 1.6364, rounded to four decimal places.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Annual cash available for debt service180000 $
- Annual principal payments70000 $
- Annual interest payments40000 $
Results
- Annual debt service$110,000.00
- Debt service coverage ratio1.6364
How to use the Debt Service Coverage Ratio Calculator
- 1Choose a single annual period and identify the debts to include.
- 2Enter annual cash available for debt service; the default is $180,000.
- 3Enter scheduled annual principal payments of $70,000 and annual interest payments of $40,000 for the default example, or replace them with your own amounts.
- 4Calculate the results and review annual debt service, which is $110,000.00 with the default inputs.
- 5Review the debt service coverage ratio of 1.6364 for the default example and compare your result with any applicable lender requirement.
Reading your result
The Annual debt service row reports the combined principal and interest obligations for the year; the default result is $110,000.00. The Debt service coverage ratio row reports available cash per dollar of debt service; 1.6364 means approximately $1.6364 is available for every $1 owed in scheduled principal and interest. A ratio above 1 indicates cash exceeds these obligations, a ratio of 1 indicates exact coverage, and a ratio below 1 indicates a shortfall. In the default example, cash exceeds annual debt service by $70,000, but that excess is not necessarily freely distributable cash.
Limitations
All inputs must cover the same year and the same set of obligations. The tool uses the cash figure you supply; it does not derive it from revenue, EBITDA, net income, or financial statements. Lenders may define available cash and debt service differently, including adjustments for taxes, capital expenditures, leases, or other obligations. The annual ratio does not capture seasonal cash shortages or payment timing, and it does not predict future borrowing costs or cash flow. Principal and interest should be nonnegative; when their total is zero, DSCR is undefined. A ratio above 1 does not by itself establish creditworthiness or compliance with a loan covenant.
Common questions
Can I enter revenue or net income as cash available for debt service?+
Not automatically. Revenue does not deduct operating costs, and net income includes accounting items that may differ from cash movements. Use a cash-available figure consistent with your financial analysis or lender's DSCR definition.
Why does this calculator include principal as well as interest?+
Debt service includes both scheduled repayment of the borrowed amount and the cost of borrowing. With the default inputs, $70,000 of principal plus $40,000 of interest produces $110,000.00 of annual debt service.
Does the default DSCR of 1.6364 mean a lender will approve a loan?+
No. It shows that $180,000 of available cash covers $110,000.00 of scheduled debt service approximately 1.6364 times. Approval also depends on the lender's minimum ratio, calculation rules, and other underwriting criteria.
How should I include multiple loans or a scheduled balloon payment?+
Sum the principal payments across all included loans and separately sum their interest payments for the same year. Include a balloon principal payment if it is scheduled within that year; do not omit it merely because refinancing is expected.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
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Results are estimates for informational purposes and are not financial, medical or legal advice.