Merge pull request #404 from roberanegussie/debtServiceCoverageRatio

Debt service coverage ratio
Clueless-Community · Jul 4, 2023 · c149751 · c149751
2 parents ad2856e + c05e185
commit c149751
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diff --git a/DOCUMENTATION.md b/DOCUMENTATION.md
@@ -9,4 +9,11 @@
 | --------------------------- | ----------------------------------------     | --------------------------------------------------------- |
 | POST /capm                  | Calculate Capital Asset Pricing Model (CAPM) | - `risk_free_return` (float): Risk-free rate of return.            |
 |                             |                                              | - `sensitivity` (float): Asset's sensitivity.            |
-|                             |                                              | - `expected_market_return` (float): Expected return of the market. |
+|                             |                                              | - `expected_market_return` (float): Expected return of the market. |
+| --------------------------- | ----------------------------------------     | --------------------------------------------------------- |
+| POST /debt_service_coverage_ratio | Calculate Debt Service Coverage Ratio  | - `revenue` (float): Amount of Company Revenue.           |
+|                                   |                                        | - `operating_expenses` (float): Cost of operating expenses.|
+|                                   |                                        | - `interest` (float): Amount of interest to be paid       |
+|                                   |                                        | - `tax_rate` (float): The tax rate applied.               |
+|                                   |                                        | - `principal` (float): Amount of principal borrowed.      |
+| -------------------------------   | ------------------------------------   | --------------------------------------------------------- |
diff --git a/ENDPOINTS.md b/ENDPOINTS.md
@@ -2050,4 +2050,30 @@ Sample Output
   "Asset's sensitivity": 6,
   "Expected return of the market": 87,
   "Expected return on the asset": "92.0%"
-}
+}
+```
+
+**POST** `/debt_service_coverage_ratio`
+
+- Request body : `{
+  "revenue": 143528.79,
+  "operating_expenses": 62148.63,
+  "interest": 4765.32,
+  "tax_rate": 20,
+  "principal": 60371.61
+}`
+- Sample output
+
+```py
+{
+  "Tag": "Debt Service Coverage Ratio",
+  "Revenue": 143528.79,
+  "Operating Expenses": 62148.63,
+  "Interest": 4765.32,
+  "Tax Rate": 0.2,
+  "Principal": 90371.61,
+  "Net Operating Income": 81380.16,
+  "Total Debt Service": 64183.866,
+  "Debt Service Coverage Ratio": 1.34
+}
+```
diff --git a/helpers/functions.py b/helpers/functions.py
@@ -1951,4 +1951,14 @@ def net_worth_calculation(assets: float, liabilities: float, loans: float, mortg
 
 def capm_calculation(risk_free_return:float, sensitivity:float, expected_market_return:float):
     expected_asset_return = risk_free_return + sensitivity * (expected_market_return - risk_free_return)
-    return expected_asset_return
+    return expected_asset_return
+
+# Function to Calculate Debt Service Coverage Ratio. 
+
+def debt_service_coverage_ratio(revenue: float, operating_expenses: float, interest: float, 
+tax_rate: float, principal: float):
+    tax_rate = tax_rate / 100
+    net_operating_income = revenue - operating_expenses
+    total_debt_service = (interest * (1 - tax_rate)) + principal
+    ratio = net_operating_income / total_debt_service
+    return ratio 
diff --git a/main.py b/main.py
@@ -127,7 +127,8 @@
 from tasks.personal_savings import personal_savings_task
 from tasks.portfolio_return_monte_carlo import portfolio_return_monte_carlo_task
 from tasks.calculate_capm import calculate_capm
-from validators.request_validators import SimpleInterestRateRequest, calculatePension, compoundInterest, futureSip, paybackPeriod, capmRequest
+from tasks.debt_service_coverage_ratio import debt_service_coverage_ratio_task
+from validators.request_validators import SimpleInterestRateRequest, calculatePension, compoundInterest, futureSip, paybackPeriod, capmRequest, DebtServiceCoverageRatio
 
 # Creating the app
 app = FastAPI(
@@ -1826,4 +1827,18 @@ def accounts_payable_turnover_ratio(total_supply_purchases: float,
     description="Estimate the expected return on an investment.",
 )
 def capm(request: capmRequest):
-    return calculate_capm(request.risk_free_return, request.sensitivity, request.expected_market_return)
+    return calculate_capm(request.risk_free_return, request.sensitivity, request.expected_market_return)
+
+# Endpoint to calculate Debt Service Coverage Ratio
+
+@app.post(
+    "/debt_service_coverage_ratio",
+    tags=["debt_service_coverage_ratio"],
+    description="Calculate Debt Service Coverage Ratio",
+)
+def debt_service_coverage_ratio(request: DebtServiceCoverageRatio):
+    return debt_service_coverage_ratio_task(request.revenue,
+	request.operating_expenses,
+	request.interest,
+	request.tax_rate,
+	request.principal)
diff --git a/tasks/debt_service_coverage_ratio.py b/tasks/debt_service_coverage_ratio.py
@@ -0,0 +1,26 @@
+from helpers import functions
+from fastapi import HTTPException, status
+
+def debt_service_coverage_ratio_task(revenue: float, operating_expenses: float, interest: float, 
+tax_rate: float, principal: float):
+    try:
+        net_operating_income = revenue - operating_expenses
+        total_debt_service = (interest * (1 - tax_rate)) + principal
+        ratio =  functions.debt_service_coverage_ratio(revenue,
+        operating_expenses,
+        interest,
+        tax_rate,
+        principal)
+        return {
+            "Tag": "Debt Service Coverage Ratio",
+            "Revenue": revenue,
+            "Operating Expenses": operating_expenses,
+            "Interest": interest,
+            "Tax Rate": tax_rate,
+            "Principal": principal,
+            "Net Operating Income": net_operating_income,
+            "Total Debt Service": total_debt_service,
+            "Debt Service Coverage Ratio": ratio
+        }
+    except:
+        return HTTPException(status_code=status.HTTP_500_INTERNAL_SERVER_ERROR) 
diff --git a/validators/request_validators.py b/validators/request_validators.py
@@ -860,4 +860,11 @@ class calculateBvps(BaseModel):
 class capmRequest(BaseModel):
     risk_free_return:float
     sensitivity:float
-    expected_market_return:float
+    expected_market_return:float
+
+class DebtServiceCoverageRatio(BaseModel):
+	revenue: float
+	operating_expenses: float
+	interest: float
+	tax_rate: float
+	principal: float