How to Calculate Debt Coverage Ratio

Debt Coverage Ratio – Measures cash flow by comparing net operating income (NOI) to the debt service (PI). A DCR (also known as DSCR debt service coverage ratio) of 1 means you have an equal amount of income and debt which leaves no room for surprise expenses. A ratio greater than 1 like 1.2 means you have positive cash flow.

   Net Operating Income
÷ Loan Principal & Interest
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= Debt Coverage Ratio


 $112,330
÷ $82,497
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= 1.36%