Calculate Net Operating Income (NOI)
Add back non-cash expenses such as depreciation and amortization if needed
Determine total debt service
Include all required principal payments
Include all required interest payments
Use the formula: DSCR = Net Operating Income รท Total Debt Service
Divide the income available for debt payments by the total debt obligations
Interpret the result: a DSCR above 1.0 means sufficient cash flow to cover debt service
Interpret the result: a DSCR below 1.0 means insufficient cash flow to cover debt service