Calculator
Company DSCR and maximum debt
The calculator gives the DSCR of each repayment year and the maximum debt that holds a target DSCR. It compares three definitions of the numerator and quantifies the debt gap between them.
Maximum debt on cash flow available
€60.5m
at a DSCR of 1.20x every year
Gap between definitions
€47.5m
or 44.00% of the maximum debt calculated on EBITDA
On cash flow available, the debt under review falls below the target DSCR in at least one year.
| Numerator | Lowest DSCR | Maximum debt at target DSCR |
|---|---|---|
| EBITDA | 1.85x | €108.0m |
| EBITDA after tax | 1.56x | €90.7m |
| Cash flow available | 1.04x | €60.5m |
| Year | Debt service | DSCR EBITDA | DSCR EBITDA after tax | DSCR Cash flow available |
|---|---|---|---|---|
| Year 1 | €13.50m | 1.85x | 1.56x | 1.04x |
| Year 2 | €13.00m | 1.98x | 1.66x | 1.11x |
| Year 3 | €12.50m | 2.12x | 1.78x | 1.19x |
| Year 4 | €12.00m | 2.28x | 1.91x | 1.27x |
| Year 5 | €11.50m | 2.45x | 2.06x | 1.37x |
| Year 6 | €11.00m | 2.63x | 2.21x | 1.48x |
| Year 7 | €10.50m | 2.84x | 2.39x | 1.59x |
The initial values are sample inputs to replace with your business plan and the terms of your debt. This calculation gives an order of magnitude and commits no lender.
Method
The calculation formulas
The loan agreement sets the definition of the numerator. The more cash outflows it deducts from EBITDA, the lower the ratio and the smaller the maximum debt. Interest is calculated once a year on the outstanding principal and cash flows grow each year at the growth rate entered.
Cash flow available
Cash flow available = EBITDA − tax paid − capital expenditure − increase in working capital
DSCR
DSCR of the year = numerator of the year ÷ (interest + principal repaid in the year)
Maximum debt
Maximum debt = lowest value, across the years, of numerator ÷ (target DSCR × debt service per euro borrowed)
Example
Worked example
A company generates €25.0m of EBITDA, pays €4.0m of tax, invests €5.0m and sees its working capital rise by €2.0m. Its cash flow available comes to €14.0m. A debt of €70.0m over 7 years at 5.00%, amortising on a straight-line basis, requires debt service of €13.5m in year 1. The year 1 DSCR is 1.85x on EBITDA and 1.04x on cash flow available. At a target DSCR of 1.20x, the maximum debt reaches €108.0m on EBITDA and €60.5m on cash flow available. The figures of this example are sample inputs.
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