Debt Service Coverage Ratio: A 1 Minute Lesson, A Lifetime of Knowledge

Keeping up with our current trend of quoting gentlemen smarter than the average twelve-year-old, and in accordance with our policy of self-promotion (REsheets is the shiznit), we’ve developed an electrifying resource sure to provide you the client, you the future client, or you… are you lost?, with the skills necessary to better yourself as a companion and a leader… what were we talking about?  Oh right, quotes:

The most valuable of all talents is that of never using two words when one will do. – Thomas Jefferson

Ah… scratch everything, here we go:

Debt Service Coverage Ratio (DSCR) is the ratio of cash available to debt service cost.

Net Operating Income / Debt Service = DSCR

A DSCR less than 1 means a negative cash flow.

A DSCR equal to 1 means a cash flow equal to the debt service.

A DSCR more than 1 means a cash flow greater than the debt service.  (This is your best bet!)

Debt Service Coverage Ratio

If you feel slighted in any way for the length of this lesson, we recommend you find the nearest library and read War & Peace, you might feel different afterwards.

Please enjoy our FREE Debt Service Coverage Ratio Calculator & Matrix