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Debt Service Coverage Ratio = Interest payable on debt/Net Profit
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Calculating DSCR in Excel sheet
Debt Service Coverage Ratio
It’s a ratio among Net Operating Income and the debt service. It's used to determine profitability after paying debt service.
Adersely Classified Assets/Tier 1 Capital +Allowance
after tax
The provision coverage ratio is calculated by dividing the total provisions for bad debts by the total non-performing assets (NPAs). The formula is: Provision Coverage Ratio = (Total Provisions / Total NPAs) x 100. This ratio indicates the extent to which a bank's provisions cover its bad loans, reflecting its ability to absorb potential losses. A higher ratio suggests better financial health and risk management.
Interest coverage ratio, is net operating income + accrual/ interest That is whether the company can cater for the interest portion.
Net operating Income/Total debt service Total debt servide-cash reuired to pay out interest as well as principal on a debt Net operating Income/Total debt service Total debt servide-cash reuired to pay out interest as well as principal on a debt
Formula to calculate the ratio
DCR in Real Estate means Debt Coverage Ratio (DCR) or Debt Service Coverage Ratio (DSCR) it is a widely used ratio in the case of buy-to-let property and in general in commercial real estate investment analysis. You can also review more information by visiting the link in "Related Links".