Debt Service Coverage Ratio

Debt Service Coverage Ratio is a statement of cash flows measure of the ability of a company to meet its interest and principal payments. In corporate finance, it is the amount of cash flow available to meet annual interest and principal payments on debt, including sinking fund payments.

In government finance, it is the amount of export earnings needed to meet annual interest and principal payments on a country's external debts.

In personal finance, it is a ratio used by bank loan officers in determining income property loans. This ratio should ideally be over 1. That would mean the property is generating enough income to pay its debt obligations.

Input Variables:

C- Cash Flow from Operations Before Interest and Tax Payments

I- Interest and Principal Payments

Output for Formula:

Returns the Debt Service Coverage Ratio