Repayment Capacity, Debt Service Coverage & Global Cash Flow

This practical webinar will move beyond reported earnings to evaluate whether a borrower can generate sufficient, sustainable cash flow to meet obligations. Learn how to assess repayment capacity using financial statements and tax returns, distinguish recurring cash flow from one-time sources, and evaluate adjustments that can strengthen — or distort — the analysis. We’ll examine debt service coverage calculations, including how inconsistent definitions, unsupported add-backs, and overlooked obligations can produce misleading results. Explore how working capital needs, capital expenditures, owner distributions, and changes in borrowing affect the cash actually available for debt repayment. The session will also address global cash flow analysis, bringing together related businesses, owners, and guarantors while avoiding double counting and recognizing limitations on the movement of funds. Practical examples will demonstrate how to stress repayment capacity and identify situations in which acceptable historical coverage masks emerging weaknesses. Leave better prepared to support credit decisions with a clear explanation of repayment sources, cash flow vulnerabilities, and the borrower’s ability to withstand adversity.