DSCR

Debt Service Coverage Ratio

Short definition

DSCR is CFADS divided by total debt service for the same period. It is cash-paying power for interest and principal; accrual profit or EBITDA alone is not DSCR.

Detailed explanation

The numerator is CFADS; the denominator is cash interest plus principal. Interest-only in the denominator turns the ratio into interest cover and is optimistic on amortising debt. Project finance often locks a tighter calc; in corporate facilities adjusted EBITDA must not be treated as CFADS.

DSCR of 1.00x means cash just covers service; any miss puts the payment at risk. Below 1.00x is a cash gap. Lenders usually want a buffer; the required minimum depends on cash-flow stability, sector, tenor, collateral and lender policy. There is no universal “1.50x is safe” rule.

Why it matters for the CFO

It is the shared cash ratio of covenants, debt capacity and stress tests. An EBITDA covenant can look loose while DSCR is tight — because of inventory, tax and principal. The CFO cannot equate the pack definition with management EBITDA.

How it is calculated

DSCR = CFADS / Toplam borç servisi

CFADS follows the contract definition. The denominator is cash interest and principal (and fees the pack counts), not accrued interest.

Variables in the formula

• DSCR: Debt service coverage ratio
• CFADS: Cash flow available for debt service
• Debt service: Cash interest + principal (+ mandatory items in the contract)

How to read it

1.50x means 1.50 TL of CFADS per 1 TL of service. That is arithmetic in an example, not a universal threshold. More stable cash flows can support a lower minimum; cyclical or project-risk names are asked for more. A single-period DSCR hides season and bullet years; read it year by year and under scenarios.

Numerical example

CFADS 150 mn TL, total debt service 100 mn TL → DSCR = 150 / 100 = 1.50x.

Definitions are educational. They are not investment, credit or tax advice.