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→Calculation: Revenue was used incorrectly where it should have been income. Tags: Mobile edit Mobile web edit |
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:<math>\text{Adj. EBITDA} = \text{Gross Operating Revenue} - \text{Operating Expenses} </math>
:<math>\text{Debt Service} = \text{Principal Repayment} + \text{Interest Payments} + \text{Lease Payments} </math> <ref>{{Cite web|url=https://propertymetrics.com/blog/how-to-calculate-the-debt-service-coverage-ratio-dscr/|title=How to Calculate the Debt Service Coverage Ratio (DSCR)}}</ref>
To calculate an entity's debt coverage ratio, you first need to determine the entity's [[net operating income]] (NOI). NOI is the difference between gross revenue and operating expenses. NOI is meant to reflect the true income of an entity or an operation without or before financing. Thus, not included in operating expenses are financing costs (e.g. interests from loans), personal income tax of owners/investors, capital expenditure and depreciation.
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