Revolver & Debt Example

Projection Year:

1
2010

2
2011

Operating Profit

15,000

10,000

5,000

Interest (Expense)
Interest Income

(4,804)
33

(4,286)
9

(4,079)
2

Earnings / Profit Before Tax (EBT)

Taxes

10,229
3,887

5,724
2,175

6,342

2009

Net Income

3
2012

4
2013

5
2014

6
2015

7
2016

8
2017

9
2018

10
2019

11
2020

12
2021

13
2022

14
2023

8,000

15,000

15,000

20,000

10,000

10,000

10,000

10,000

10,000

10,000

10,000

(3,952)
0

(3,645)
5

(3,169)
10

(2,654)
28

(2,160)
48

(1,680)
54

(1,200)
62

0
125

0
183

922
351

4,048
1,538

11,360
4,317

11,841
4,500

17,374
6,602

7,888
2,998

8,374
3,182

8,862
3,368

9,354
3,554

9,848
3,742

10,125
3,847

10,183
3,870

3,549

572

2,510

7,043

7,342

10,772

4,891

5,192

5,494

5,799

6,106

6,277

6,313

0
25,714
20,000
45,714

0
21,429
20,000
41,429

3,894
17,143
20,000
41,037

6,171
12,857
20,000
39,028

4,913
8,571
20,000
33,485

2,357
4,286
20,000
26,643

0
0
20,000
20,000

0
0
16,000
16,000

0
0
12,000
12,000

0
0
8,000
8,000

0
0
4,000
4,000

0
0
0
0

0
0
0
0

0
0
0
0

6,342
0
0
0
0
0
0
6,342

3,549
0
0
0
0
0
0
3,549

572
0
0
0
0
0
0
572

2,510
0
0
0
0
0
0
2,510

7,043
0
0
0
0
0
0
7,043

7,342
0
0
0
0
0
0
7,342

10,772
0
0
0
0
0
0
10,772

4,891
0
0
0
0
0
0
4,891

5,192
0
0
0
0
0
0
5,192

5,494
0
0
0
0
0
0
5,494

5,799
0
0
0
0
0
0
5,799

6,106
0
0
0
0
0
0
6,106

6,277
0
0
0
0
0
0
6,277

6,313
0
0
0
0
0
0
6,313

(720)
74

(240)
88

Balance Sheet
Revolver
Senior Debt
Subordinated Debt
Total Debt

5,000
30,000
20,000
55,000

Cash Flow
Operating Cash Flow:
Net Income
Depreciation
Changes in Working Capital
Accounts Receivable
Inventory
Accounts Payable
Other
Total Operating Cash Flow
Investing Cash Flow:
Purchases of PP&E (Capital Expenditures)
Total Investing Cash Flow

(500)
(500)

(500)
(500)

(500)
(500)

(500)
(500)

(500)
(500)

(500)
(500)

(500)
(500)

(500)
(500)

(500)
(500)

(500)
(500)

(500)
(500)

(500)
(500)

Financing Cash Flow:

(Payments To) / Borrowings From Revolver
(Payments To) / Borrowings From Senior Debt
(Payments To) / Borrowings From Subordinated Debt
Sale of Stock
Total Financing Cash Flow

(5,000)
(4,286)
0
0
(9,286)

0
(4,286)
0
0
(4,286)

3,894
(4,286)
0
0
(391)

2,276
(4,286)
0
0
(2,010)

(1,257)
(4,286)
0
0
(5,543)

(2,556)
(4,286)
0
0
(6,842)

(2,357)
(4,286)
0
0
(6,643)

0
0
(4,000)
0
(4,000)

0
0
(4,000)
0
(4,000)

0
0
(4,000)
0
(4,000)

0
0
(4,000)
0
(4,000)

0
0
(4,000)
0
(4,000)

Net Cash Flow

(3,444)

(1,237)

(319)

1,000

3,629

391

692

994

1,299

5,000
1,556

1,556
319

319
0

0
0

0
1,000

1,000
1,000

1,000
4,629

4,629
5,020

5,020
5,711

5,711
6,706

6,706
8,005

Cash Beginning of Period

Cash End of Period

195952872.xls.ms_office 12/15/2013 6:54 PM

5,000

(500)
(500)

(500)
(500)

0
0
0
0
0

0
0
0
0
0

1,606

5,777

5,813

8,005
9,611

9,611
15,388

15,388
21,202

12

Model Mechanics
Interest Expense
Revolver Interest
Senior Interest
Subordinated Interest
Total Interest Expense

175
2,229
2,400
4,804

0
1,886
2,400
4,286

136
1,543
2,400
4,079

352
1,200
2,400
3,952

388
857
2,400
3,645

254
514
2,400
3,169

83
171
2,400
2,654

0
0
2,160
2,160

0
0
1,680
1,680

0
0
1,200
1,200

Revolver:
Cash Flow w/o revovler
Cash on hand BOP
Total available cash:
Less, minimum cash for company under sweep:
Total available to pay revolver:

1,556
5,000
6,556
(1,000)
5,556

(1,237)
1,556
319
0
319

(4,214)
319
(3,894)
0
(3,894)

(2,276)
0
(2,276)
0
(2,276)

2,257
0
2,257
(1,000)
1,257

2,556
1,000
3,556
(1,000)
2,556

5,986
1,000
6,986
(1,000)
5,986

391
4,629
5,020
(1,000)
4,020

692
5,020
5,711
(1,000)
4,711

994
5,711
6,706
(1,000)
5,706

Revolver Balance BOP:

Payment (to) / from revolver

5,000
(5,000)

0
0

0
3,894

3,894
2,276

6,171
(1,257)

4,913
(2,556)

2,357
(2,357)

0
5,000

0
5,000

3,894
5,000

4,913
5,000

2,357
5,000

0
3.05
2.75
Bust
1

0
4.14
2.75
Bust
1

0
2.23
2.75
0

Credit Ratios and tests

Credit Failure
Revolver draw
Revolver maximum

Debt to operating income

Minimum covenant

38%

Cash Interest Earnings

Revolver Interest
Senior Interest
Subordinated Interest

1%
7%
8%
12%

Revolver cash sweep minimum cash on hand

195952872.xls.ms_office 12/15/2013 6:54 PM

1,299
6,706
8,005
(1,000)
7,005

0
0
240
240

1,606
8,005
9,611
(1,000)
8,611

0
0
0
0

5,777
9,611
15,388
(1,000)
14,388

0
0
0
0

5,813
15,388
21,202
(1,000)
20,202

0
0

0
0

0
0

0
0

0
0

0
0

0
0

0
5,000

0
5,000

0
5,000

0
5,000

0
5,000

0
5,000

0
5,000

0
5,000

0
1.78
2.75

0
1.00
2.75

0
1.60
2.75

0
1.20
2.75

0
0.80
2.75

0
0.40
2.75

2.75

2.75

2.75

Inputs:
Tax Rate

Senior Debt Term

Subordinated Debt Term

0
0
720
720

6,171
5,000
Overdraw
0
1
8.21
4.88
2.75
2.75
Bust
Bust
1
1

7 years
5 years (after senior paid)
1,000

22