Request Demo


Leanus then allows you to calculate the DSCR extension in various ways either on historical data, that on provisional data (quarterly, half-yearly, etc) which on the forecast data of the Business Plan and to compare the DSCR extension between different companies (Benchmark).

Il DSCR extension It provides:

  • in the Numerator the Cash Flow generated in the period
  • in the Denominator the commitments to the financial system (Capital + Interest)

A ratio greater than "1" would indicate the company's ability to meet its commitments thanks to the ability to generate cash deriving from core activities.

Operational issues

To calculate the DSCR extension in a timely manner it is necessary to know detailed information that is generally known only to the company (treasury dynamics, amortization plans, etc.)

If this information is known, the user can enter it directly on the screen by "flagging the checkbox and reading the instructions"; in all other cases Leanus allows you to make a reliable estimate and for each accounting period with different methodologies. It must also be taken into account that when choosing the methodology, the different information that can characterize the data source must be taken into account:

- Complete official balance sheet
- Abbreviated Official Balance Sheet
- Proprietary accounting situation
- ...

Leanus allows you to handle all the different exceptions, allowing the user to complete the model in case of missing information

The Calculation of DSCR extension in Leanus

Leanus calculates the DSCR extension in 4 different modes

  • DSCR extension su CFCCO (Cash Flow Operating Working Capital)
  • DSCR extension su CFO (Operating Cash Flow)
  • DSCR extension su CFO net of tax cash flow
  • Leanus DSCR extension

Al Numerator of the DSCR extension you can choose:

  • Cash Flow Operating Working Capital
  • Operating Cash Flow
  • Operational Cash Flow adjusted for Fiscal Cash Flow

Both adjusted to include Finance Charges that would otherwise be excluded from the calculation

The values ​​and calculation methods can be viewed and modified in the Financial Statement prepared by Leanus

Al Denominator of the DSCR extension, in case the details relating to the commitments are not known, an automatic estimate is inserted calculated as follows

  • Financial Debts a MLT / amortization periods (preset to 3 and editable)
  • Financial charges
  • Share of debt to BT (preset to 20% and changeable)

Leanus also calculates the DSCR extension according to a proprietary algorithm that takes into account other potential financial resources

The calculation of the DSCR extension is available in the following menus:

  • Budget Analysis (for the analysis of the DSCR extension on historical data)
  • Benchmark (for comparison of the DSCR extension of two or more competitors)
  • Business Plan (for the analysis of the DSCR extension on prospective data)

After entering the hypotheses it is necessary to click on the button Update to record the values.



DSCR extension (Debt Service Coverage Ratio) is a measure of solvency that indicates a company's ability to generate sufficient income to cover debt payments. It is calculated by dividing the company's annual net operating income by its annual financial commitments. A DSCR extension high indicates that the firm has a good ability to meet its financial obligations, while a DSCR extension low can be interpreted as a signal of default risk. Typically, investors and lenders require a DSCR extension minimum for assessing the solvency of a company.


In order to verify the financial sustainability of the corporate debt, analysts and experts in the sector increasingly resort to a new indicator, which is not limited to quantifying in a "static" way the total amount of financial debt in relation to shareholders' equity ( as happens in traditional budget ratios, such as the ratio Pfn / EBITDA), but which makes it possible to examine, also on a prospective basis, the debt repayment capacity of the company and the consequent financial sustainability of the related business development plans.

A tool that makes it possible to assess the sustainability of the debt from a perspective perspective is the DSCR extension, or Debt Service Coverage Ratio, which compares the cash flow produced by the company, with the financial commitments undertaken in terms of principal and interest to be repaid over the time horizon considered.

In using the DSCR extension it should be borne in mind that when a company is experiencing strong growth, it increases its working capital by generating a cash absorption; the effect is a negative operating cash flow and therefore a DSCR extension Negative. The opposite effect occurs when the firm reduces its turnover.


To overcome the limits of the DSCR extension, Leanus elaborates its own proprietary algorithm, Leanus DSCR extension, which takes into account other aspects related to financial management such as cash and cash equivalents, any contributions from shareholders and other elements. The Leanus algorithm DSCR extension, together with the Leanus Score and the debt capacity is the exclusive property.


Il DSCR extension in fact, it can assume higher values ​​equal to or lower than unity:

- Higher than unity (DSCR extension> 1), in the event that the operating cash flow generated exceeds the financial commitments to service the debt;
- Equal to unity (DSCR extension = 1), the operating cash flow generated is totally absorbed by financial commitments to service the debt;
- Less than unity (DSCR extension<1), in the event that the operating cash flow generated is lower than the financial commitments to service the debt in the period considered, highlighting situations of financial tension with possible difficulties in repaying the debt.

Source: Leanus, Infinance publication


Was it helpful?

Si No
You indicated this topic was not helpful to you ...
Could you please leave a comment telling us why? Thanks you!
Thank you for your feedback.

Post your feedback on this topic.

Please do not use for support inquiries.
For customer support, contact us here.

Pubblica commento