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Debt payment coverage checker
Paste a borrower's debts and earnings. Get cover against all charges, in a bad year too, and a pass or fail.
Debt payment coverage checker is a free AI skill for the job "Handle money and investing". Give the instructions to an AI assistant that supports the required files and tools, then review its output.
Free · No account · Made by AI Blocks · Thinking: high
What it does
A lender gets a fixed payment and none of the upside. The only question that matters is whether the borrower can keep paying when business is poor. A single good year says very little. A pledge of property says little too, because pledged assets lose value just when they are needed. This skill lists every claim on the borrower, adds up all the yearly charges and divides average earnings by that total. It shows the average with loss years left in and with loss years set to zero. The bar goes up as the business gets less steady, and goes up again for a preferred share. It also redoes the sum at the rate the borrower would pay to refinance. It is a method of analysis, not financial advice, and it never says buy or sell.
You give it
- The claim you are testing, with rank, amount, rate, due date and price
- Seven or more years of earnings, or income statements
- The borrower's other debts and lease payments
- A first label from "Investment or speculation sorter" (optional)
You get
- A table of every fixed claim and the total yearly charge
- Average cover on two bases, with the bar and why it was chosen
- Notes on the trend, worst year, latest year and refinancing rate
- How far earnings can fall before cover reaches 1.0
- A pass, borderline or fail with the facts that would change it
Use it when
- You are about to lend to a business and want a test beyond "they seem solid".
- You are looking at a bond, note or preferred share and want to see how well earnings cover everything the company owes.
- A borrower asks you to accept a high rate in return for thin cover.
How to use it
- Start a chat with the skill. Open it if you added it to your AI, or copy it and paste it in.
- Paste the claim and the borrower's statements. Add every other debt and lease you know of.
- Say whether your earnings figures are before or after income tax.
- Read the borderline and fail reasons first. Ask what would change the call.
- Take the result to "Equity cushion ratio tester" for a second test.