Debt Service Coverage Ratio Formula (DSCR) is calculated by dividing the net operating income by the total debt service cost.
Debt Service Coverage Ratio =Operating Income/Total debt service cost
Operating Income is the income which leftover after the payment of all the operating expenses. Operating income is also called EBIT. On the income statement, it is separately stated.
All the cost related to servicing the debt of the company is called total debt services. Interest payment, principal payments, and other obligations are often included in the total debt services. In the financial statement, it is given. You can check the definition of Debt Service Coverage Ratio DSCR.
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