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Debt Service Coverage Ratio
Ratio of net operating income to annual debt payments. Commercial lenders use the DSCR to analyze how large of a commercial loan can be supported by the cash flow generated from the property, or to determine how much income coverage there is at a certain loan amount.
How do you calculate DCR / DSCR?
The formula to calculate DCR/DSCR:
DSCR = NOI/Annual Debt Service