The Annual Debt Service Coverage Ratio Calculator is a crucial tool for businesses and financial professionals to evaluate a company’s ability to meet its debt obligations. This calculator helps assess financial health by comparing a company’s annual net operating income to its annual debt service requirements. By using this tool, businesses can determine their creditworthiness and capacity to take on additional debt. Lenders and investors also find this ratio valuable when making lending decisions or assessing investment risks. The Annual Debt Service Coverage Ratio provides insights into a company’s financial stability and its ability to generate sufficient cash flow to cover debt payments. Use this calculator to gain a clear understanding of your business’s financial position and make informed decisions about debt management and future borrowing.
Annual Debt Service Coverage Ratio (ADSCR) shows how many dollars of adjusted cash flow you have for every dollar of annual principal + interest; lenders usually want ≥ 1.25 × before approving new credit (Moody’s Project Finance Methodology, 2023).
