![]() ![]() ![]() In this tutorial, we will use the cash flow available for debt service (CFADS) to solve for a maximum debt limit. This layout for calculating principal is also discussed in detail in the “debt sculpting to achieve target DSCR without VBA” tutorial, where we sculpted the principal repayments in every period to achieve a uniform DSCR of 1.50x. To set up the financial model principal repayments need to be set to a target debt service coverage ratio (DSCR) like in screenshot one, which is also found in the attached model. This exercise indicates the maximum debt size that can be supported by a certain cash flow available for debt service (CFADS) profile. This tutorial demonstrates how the maximum debt limit can be solved based on a target debt service cover ratio (DSCR) when modelling a project finance project.
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