Debt Service Coverage Ratio

Calculate the debt service coverage ratio, a solvency ratio that measures a company’s ability to service its debt with its net operating income.

The debt service coverage ratio provides insights into a company’s ability to meet its debt obligations from its operating income. It is especially important for companies with significant debt obligations, as a lower ratio indicates higher financial risk and potential difficulties in servicing debt payments.

The formula is as follows:

Also known as: DSCR, debt service ratio.

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Calculate the Debt Service Coverage Ratio in Python

The Debt Service Coverage Ratio is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_debt_service_coverage_ratio as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

debt_service_coverage_ratios = toolkit.ratios.get_debt_service_coverage_ratio()

Which returns:

Parameters

get_debt_service_coverage_ratio accepts the following parameters:

• rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
• growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
• lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
• standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
• trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.

Related Solvency Ratios

The Ratios module page introduces the module, and the sidebar lists all of its functions.