Excel is efficient to hold data and use them afterward. As a result, **Balance Sheets **or **Debt** and **Income Statements** exiting in a Worksheet can be easily used to find the debt service coverage ratio formula in Excel.

Letâ€™s say we have a userâ€™s **Debt** and **Income Statement,** or **Balance Sheet** as shown in the image below. And we want to find the **Debt Service Coverage Ratio** (**DSCR**) from it.

**Debt and Income Statement**

**Balance Sheet**

In this article, we demonstrate the basics and find the **Debt Service Coverage Ratio Formula**Â in Excel with examples.

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**What Is Debt Service Coverage Ratio (DSCR)?**

Companies, organizations, or individual finances require a parameter to predict their ability to pay their debt obligations. Therefore, those entities need to have a **Balance Sheet **or basic **Debt** and **Income statement** to have a clear view of their financial status. The **ratio** between **Net Operating Income **or** Cash Flow** and **Debt Service** is known as **Debt Service Coverage Ratio** (**DSCR**). And it is a must to have a **DSCR** of more than **1** to stay on the safe side. Thus the formula stands

`Debt Service Coverage Ratio (DSCR)=Net Operating Income/Debt Service`

**Net Operating Income** = Cash Flow after deducting all the expenses.

**Debt Service** = Total Obligations that are needed to be met.

## â€‹**Calculating Debt Service Coverage Ratio with Formula in Excel with Examples**

**đź”„ Basic Debt Service Coverage Ratio (DSCR) Calculation:**

The fundamental entities users need to have to calculate the **Debt Service Coverage Ratio** (**DSCR**) are 2; **Net Income** or **Cash Flow** (deducting expenses), **Total Debt** or **Debt Service**. Then **finding the ratio** between **Net Income** or **Cash Flow** and **Debt Service** results in **Debt Service Coverage Ratio** (**DSCR**).

Follow the below examples for better understanding.

**Example 1: Calculate Debt Service Coverage Ratio from Income and Debt Statement**

In case, where users have **Income** and** Debt Statements**, they can easily find the **Debt Service Coverage Ratio** (**DSCR**) just by dividing them.

As mentioned earlier, we have an **Income** and **Debt Statement** as shown in the below image. You can get this statement from your accountant or your financial logs.

**Steps:** Insert the below formula (i.e.,** Net Income/Total Debt Service**) in any blank cell.

`=H10/E10`

đź”Ľ Press **ENTER**, and youâ€™ll get the **DSCR** instantly as depicted in the below picture.

You can have your financial statement or use the attached dataset as **Template**.

**Read More: ****Debt to Income Ratio Calculator in Excel (Create with Easy Steps)**

**Similar Readings**

**How to Calculate Current Ratio in Excel (2 Suitable Examples)****How to Use Debt to Equity Ratio Formula in Excel (3 Examples)****How to Calculate Current Portion Of Long Term Debt in Excel**

**Example 2: Calculate Debt Service Coverage Ratio (DSCR) from Balance Sheet**

Companies or institutions generally maintain **Balance Sheets** depicting their Incomes and Expenses. Using those entries, users can simply find the **Debt Service Coverage Ratio** (**DSCR**).

Suppose the **Balance Sheet** may look like the following screenshot.

**Step 1:** Type the following formula in any cell.

`=-C13/C12`

In the formula, **C13** refers to the **Net Cash Flow** or** Income** and **C12**, **Debt Service**.

**Step 2:** Use the **ENTER** key then drag the **Fill Handle** to the right to appear the** DSCR**s for each column.

Financial **Balance Statements**â€™ fields vary from company to company. However, fundamental entries such as **Net Income** or **Cash Flow**,** Debt** or **Liability** are always present in them.

**Read More: ****How to Calculate Ratio of 3 Numbers in Excel (3 Quick Methods)**

**Conclusion**

In this article, we discuss the basics of **Debt Service Coverage Ratio** (**DSCR**) and find it using different Financial Statements. Hope this article clarifies your understanding of **DSCR** and helps you to achieve your desired outcome. Comment, if you have further inquiries or have anything to add.

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