title = "Debt Service Coverage Ratio (DSCR) Calculations"

content = """
The Debt Service Coverage Ratio (DSCR) is a critical metric used to measure a
business's ability to cover its annual debt payments with its operating cash flow.
At Silver Oak Bank, a DSCR of 1.25x or higher is typically required for commercial
loans.

**The Formula:**
DSCR = Net Operating Income (NOI) / Total Debt Service

**Components:**
1. **Net Operating Income:** Often approximated as EBITDA. For more conservative
   analysis, we may use 'EBITDA - Unfunded CAPEX - Cash Taxes - Distributions.'
2. **Total Debt Service:** The sum of all principal and interest payments due
   within the next 12 months on all business debts.

**Interpretation:**
- **DSCR < 1.0x:** The business has insufficient cash flow to cover its debt
  obligations without relying on external sources or asset liquidation.
- **DSCR = 1.0x:** The business is exactly 'breaking even' on its debt service.
- **DSCR > 1.25x:** Provides a 25% 'cushion' for unexpected downturns in revenue
  or increases in expenses.

Analysts must also perform sensitivity analysis, testing how the DSCR holds up
under scenarios such as a 10% decrease in revenue or a 2% increase in interest
rates.
"""

version = "0.0.1"
