Quick answer
DSCR = net operating income ÷ annual debt service. NOI of $125,000 against debt service of $100,000 gives a DSCR of 1.25 and $25,000 of cash flow after debt.
Enter the net operating income and annual debt service. The calculator returns the DSCR and the cash flow after debt. Use this debt service coverage ratio calculator to check your own figures.
Related tools: Debt Ratio Calculator: Total liabilities as a share of total assets. Debt-to-Income Ratio Calculator: Monthly debt payments as a share of gross monthly income. Current Ratio Calculator: Current ratio from current assets and current liabilities.
How to use the Debt Service Coverage Ratio Calculator
- Enter net operating income (per year) ($).
- Enter annual debt service ($) (above 0).
- Press Calculate to see the result, and use Reset to start again.
| Input | What to enter | Allowed values |
|---|---|---|
| Net operating income (per year) | A number, in $ | — |
| Annual debt service | A number, in $ | > 0 |
Formula and method
Formula
DSCR = net operating income ÷ annual debt service
IEEE-754 double precision; money shown to cents, rates to 4 decimals. Results are estimates, not financial advice.
A ratio above 1 means income covers the debt payments.
Worked examples
These examples are verified: each one is an automated test case that the live calculator must reproduce exactly.
Example 1
Inputs: Net operating income (per year) = 125000; Annual debt service = 100000.
| Result | Value |
|---|---|
| DSCR | 1.25 |
| Cash flow after debt service | $25,000.00 |
Example 2
Inputs: Net operating income (per year) = 80000; Annual debt service = 100000.
| Result | Value |
|---|---|
| DSCR | 0.8 |
| Cash flow after debt service | -$20,000.00 |
The first line is the headline result (dSCR). Below it the debt Service Coverage Ratio Calculator lists cash flow after debt service, which describe the same case from other angles. IEEE-754 double precision; money shown to cents, rates to 4 decimals. Results are estimates, not financial advice.
Lender thresholds
Lenders typically require a DSCR of at least 1.2 to 1.25 for commercial loans. A DSCR of 1.0 means income exactly covers the payments, and below 1.0 means the property can't cover its debt.
Debt service
Annual debt service is the total of principal and interest payments for a year. Debt service must be positive. A 1.25 ratio means NOI can fall 20% before payments aren't covered.
How the result changes with net operating income
Holding every other input at the first worked example, this table changes only net operating income. It shows how sensitive the answer is to that one value; each row was produced by running this calculator.
| Net operating income | DSCR | Cash flow after debt service |
|---|---|---|
| 62500 | 0.625 | -$37,500.00 |
| 125000 | 1.25 | $25,000.00 |
| 250000 | 2.5 | $150,000.00 |
| 500000 | 5 | $400,000.00 |
What happens with invalid input
These messages are produced by the calculator itself, so you know what to fix.
- Annual debt service: entering "0" shows "Annual debt service must be greater than 0." beside that field and no result.
- Net operating income (per year): left empty shows "Enter net operating income (per year)." beside that field and no result.
Choosing between the Debt Service Coverage Ratio Calculator and similar calculators
Each row shows what a related calculator on this site asks for and what it returns, so you can pick the one that matches your question.
| Calculator | You enter | It returns |
|---|---|---|
| [Debt Ratio Calculator](/finance/debt-ratio-calculator/) | total liabilities and total assets | Debt ratio |
| [Debt-to-Income Ratio Calculator](/finance/debt-to-income-ratio-calculator/) | monthly debt payments and gross monthly income | Debt-to-income ratio |
| [Current Ratio Calculator](/business/current-ratio-calculator/) | current assets and current liabilities | Current ratio |
| [Quick Ratio Calculator](/business/quick-ratio-calculator/) | cash and equivalents, accounts receivable and current liabilities | Quick ratio |
| [Return on Equity Calculator](/business/return-on-equity-calculator/) | net income, equity at start and equity at end | Return on equity |
Background: rental property metrics
Rental property metrics answer different questions. The cap rate is net operating income divided by the purchase price and ignores financing; cash flow is income minus operating expenses minus debt service; cash-on-cash return divides annual cash flow by the cash you actually invested. Rules of thumb such as the 1% rule (monthly rent at least 1% of the price) are quick screens, not decisions.
Check the assumptions behind any result: vacancy, management fees, repairs and taxes. Published benchmark ranges for a good cap rate or return vary between sources.
Assumptions and limitations
- Debt service must be positive
Estimates only. Taxes, fees and lender or authority rules vary by place and date, so confirm figures with the relevant authority or professional.
If a required value is empty, not a number, or outside its allowed range, the form marks that field with a message and shows no result instead of a misleading number. The automated checks deliberately try invalid entries for annual debt service and net operating income (per year) to confirm this.
Frequently asked questions
What DSCR do banks want?
Banks commonly want a DSCR of at least 1.2 to 1.35; the example's 1.25 sits at the low end.
What if DSCR is below 1?
The property doesn't cover its debt.
How can I raise DSCR?
Increase NOI or reduce debt.
What does the Debt Service Coverage Ratio Calculator calculate?
Net operating income relative to annual debt payments. It returns DSCR and Cash flow after debt service.
What formula does the Debt Service Coverage Ratio Calculator use?
DSCR = net operating income ÷ annual debt service. A ratio above 1 means income covers the debt payments.
What do I need to enter in the debt Service Coverage Ratio Calculator?
You enter Net operating income (per year) ($) and Annual debt service ($).
How is the result rounded or limited?
IEEE-754 double precision; money shown to cents, rates to 4 decimals. Results are estimates, not financial advice. Debt service must be positive.
What is an example of a debt Service Coverage Ratio result?
With net operating income (per year) 125000 and annual debt service 100000, the dSCR is 1.25.
Can I rely on this calculator for a decision?
Estimates only. Taxes, fees and lender or authority rules vary by place and date, so confirm figures with the relevant authority or professional. For this calculator in particular: Debt service must be positive.
Related calculators
- Debt Ratio Calculator — Total liabilities as a share of total assets.
- Debt-to-Income Ratio Calculator — Monthly debt payments as a share of gross monthly income.
- Current Ratio Calculator — Current ratio from current assets and current liabilities.
- Quick Ratio Calculator — Acid-test ratio of liquid assets to current liabilities.
- Return on Equity Calculator — Net income relative to average shareholders' equity.
- Accounts Payable Days Calculator — Days payable outstanding.
Sources
- Standard time-value-of-money relations (e.g. Brealey, Myers & Allen, Principles of Corporate Finance)
Content last reviewed 2026-11-04. Formulas and worked examples are checked by automated tests against independently computed values.