Sizing the debt from the cash flow calculator

Sizing the debt from the cash flow, worked through in your browser.

Interactive: sizing the debt from the cash flowMedium

A corporate borrows a multiple of its earnings. An asset borrows whatever its own cash flow can service at the coverage the lender insists on — which is a different question and gives a different answer.

Cash available for debt service ($m/yr) Target coverage (×) Interest rate % Tenor (years)

Annual debt service: —
Debt supported: —
Principal repaid in year one: —
Interest in year one: —
Coverage after a fifth off: —
Fall to reach 1.00×: —
Reading: —

A level annuity at one fixed rate, which no real facility is: there is usually a construction period with no service at all, a margin that steps, and a tail the lender leaves after the contracts end. Information and education only. Not advice, not a valuation, and not a quote for anything.

The idea behind it

This calculator belongs to Structured & Asset Finance, where the mechanism it computes is explained step by step, with the formula, what each input means and where the simple model stops being right. Everything is computed in your browser; nothing you type is sent anywhere.

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Not advice. This explains how something works; it is not a recommendation, and nothing here is tailored to you. You can lose everything you put in — with leveraged instruments, considerably more. StrikeAndYield is not a regulated firm and provides no financial services.

The same in full — six points, and why each one matters

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Nothing here is tailored to you. This is written for a general audience. It does not consider your objectives, financial situation, knowledge, time horizon or tolerance for loss.
The examples are simplified. Worked examples use round numbers and leave out costs, spreads, taxes, collateral, settlement and market conventions that materially change real outcomes.
The models are teaching models. Formulas shown are standard textbook formulations. Institutions add calibration, live market data and credit, funding and capital adjustments — nothing here will reproduce a dealer’s quote or produce a valuation you can rely on.
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