Debt Schedule
AdvancedA debt schedule is a part of a financial model that tracks a company's borrowings over time, including opening balances, new borrowing, repayments, interest and closing balances for each type of debt.
Debt schedules are essential in leveraged buyout models, project finance models and corporate forecasts. They link the company's cash flows with its borrowings and interest costs.
A typical debt schedule shows each loan or bond separately, with its interest rate, required repayments and any optional repayments made from surplus cash. Interest expense flows to the income statement, closing balances flow to the balance sheet and repayments flow to the cash flow statement.
For example, a company with a 100,000,000 term loan repaid at 10,000,000 a year and a revolving credit facility would show both in its debt schedule. If the company generates extra cash, the model might use it to repay the revolver first.
Debt schedules often create circular references, because interest depends on debt balances, which depend on cash flow, which depends on interest. Modellers handle this with iterative calculations or by basing interest on opening balances.
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