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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
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.
after tax
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
The cash coverage ratio is useful for determining the amount of cash available to pay for interest, and is expressed as a ratio of the cash available to the amount of interest to be paid.To calculate the cash coverage ratio, take the earnings before interest and taxes (EBIT) from the income statement, add back to it all non-cash expenses included in EBIT (such as depreciation and amortization), and divide by the interest expense. The formula is: Earnings Before Interest and Taxes + Non-Cash Expenses Interest Expense.