Finance Formulas / July 9, 2018 / Aniyah Booth
For example, suppose Net Operating Income (NOI) is $120,000 per year and total debt service is $100,000 per year. In this case the debt service coverage ratio (DSCR) would simply be $120,000 $100,000, which equals 1.20. It’s also common to see an "x" after the ratio. In this example it could be shown as "1.20x", which indicates that NOI covers debt service 1.2 times.
Generally speaking, the higher the asset turnover ratio, the better the company is performing, since higher ratios imply that the company is generating more revenue per dollar of assets. The asset turnover ratio tends to be higher for companies in certain sectors than in others. Retail and consumer staples, for example, have relatively small asset bases but have high sales volume and, thus, often yield the highest asset turnover ratio.
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