Worked Walkthrough: Build a DSCR Downside Case
Calculate a downside DSCR case and interpret the management action it implies.
Base cash available for debt service is $18.5 million. Debt service is $12.5 million. A $4.0 million customer receipt may slip outside the test period. DSCR = cash available for debt service / required debt service; downside case = plausible driver miss plus action trigger. The common trap is reporting only the base-case DSCR and calling the company safe. That hides whether one realistic timing miss would break the coverage floor. Base case $18.5 million / $12.5 million = 1.48x DSCR. The base case clears the 1.25x management floor, but that does not prove resilience. Downside driver Move the $4.0…
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