Debt Service
Short definition
Debt service is cash interest plus principal (and mandatory fees the contract counts) paid in the period. Accrued interest is not cash service; principal does not appear on the P&L.
Detailed explanation
It is the DSCR denominator. Putting only interest in an amortising loan shrinks the denominator and inflates DSCR. Capitalised interest is not a cash outflow; it is deferred service.
Lease payments, factoring and margin calls are inside service in some packs. Until the definition is locked, “we are servicing debt” is empty.
Why it matters for the CFO
It is the denominator versus CFADS and versus the 13-week budget. In a bullet year service gaps; average annual service hides that gap.
How it is calculated
Borç servisi = Nakit faiz + Anapara ödemesi (+ sözleşmedeki zorunlu ücretler)
Variables in the formula
- Debt service: Period cash interest + principal
How to read it
Service / CFADS = 1/DSCR. If service exceeds CFADS, the gap is cash, a draw, or a missed payment. Tenor produces very different service on the same stock of debt.
Numerical example
Cash interest 60 mn TL, principal 40 mn TL → period debt service = 100 mn TL.
Related calculators
Güven Sayılgan’s writing on this topic
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.