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| Coverage Ratio Formula: Coverate Ratio = Net Operating Income/Total Debt Service | |||
Coverage Ratio Definition The Coverage Ratio Calculator is a financial calculator will easily calculate the coverage ratio for a company. The formula for coverage ratio is net operating income divided by total debt service. The coverage ratio is sometimes referred to as the debt service coverage ratio (DSCR) or the interest coverage ratio and is used many times by lenders and commercial bankers to asses a company’s ability to service their debt using proceeds from their net operating income. The higher the coverage ratio is then generally speaking the better off a company will be as they will be able to make their debt payments using funds from their net operating income. Try out the online coverage ratio calculator now! How to Calculate Coverage Ratio Let's be honest - sometimes the best coverage ratio calculator is the one that is easy to use and doesn't require us to even know what the coverage ratio formula is in the first place! But if you want to know the exact formula for calculating coverage ratio then please check out the "Formula" box above. |