Common use of Debt Service Coverage Ratio Clause in Contracts

Debt Service Coverage Ratio. Calculation: If school owns its facility OR if the school leases its facility and the lease is capitalized: (Net Income + Depreciation Expense + Interest Expense) ÷ (Principal + Interest + Lease Payments) If school leases its facility and the lease is not capitalized: (Facility Lease Payments + Net Income + Depreciation Expense + Interest Expense) ÷ (Principal + Interest + Lease Payments) Data Source: Annual Fiscal Audit Report Exceeds Standard The school’s debt service coverage ratio is 1.5 or greater OR the school operates debt-free. Approaches Standard The school’s debt service coverage ratio is between .9 and 1.09 Does Not Meet Standard Debt Service Coverage Ratio is less than .9

Debt Service Coverage Ratio. Calculation: If school owns its facility OR or if the school leases its facility and the lease is capitalized: (Net Income + Depreciation Expense + Interest Expense) ÷ divided by (Principal + Interest + Lease Payments) If school leases its facility and the lease is not capitalized: (Facility Lease Payments + Net Income + Depreciation Expense + Interest Expense) ÷ divided by (Principal + Interest + Lease Payments) Data Source: Annual Fiscal Audit Report Exceeds Standard The school’s debt service coverage ratio is 1.5 or greater OR the The school operates debt-free. Approaches Standard The school’s debt service coverage ratio is between .9 and 1.09 Does Not Meet Standard Debt Service Coverage Ratio is less than .9