Which input is used in a cash flow DSCR but not in an accounting-based DSCR?

• A. Net operating income
• B. Net income
• C. EBITDA
• D. Cash available for debt service

Answer: (D)

Cash flow DSCR focuses on actual cash available to pay debt, not accounting profits. The key input is cash available for debt service, a cash-based measure that reflects the real funds available to meet debt payments after necessary cash expenditures and adjustments. In contrast, the other inputs—net operating income, net income, and EBITDA—are accrual-based profit figures. They incorporate non-cash items, depreciation, and timing differences and don’t directly represent cash that can be used to service debt. Because the goal of a cash flow DSCR is to assess genuine cash strength to cover debt service, the cash available for debt service is the appropriate input, whereas the others describe profitability, not the actual cash flow to debt.