DEBT SCHEDULE EXPLAINED
Purpose of Debt Schedule
The Debt Schedule is an essential part of the financial model without which it would be
hard to produce forecasted financial statements in a way that is fully integrated.
Particularly, the debt schedule equips the analyst/investment banker to:
1. Derive interest expense and thus complete the forecasted income statement from
EBIT (Operating Income) to Net Income.
2. Complete the forecasted liabilities section of the balance sheet by deriving short
term and long-term debt.
3. Finalize the forecasted financing activities section of the cash flow statement.
The Debt Schedule essentially utilizes free cash flow to make mandatory and optional
(discretionary debt repayments, consequently calculating both beginning and ending
annual balances for each debt tranche.
Interest Expense is linked to the income statement
Ending Balance is linked to the liabilities section of the balance sheet
Paydown/Drawdown is linked to the financing activities section of the cash flow
statement
Purpose of Debt Schedule
The Debt Schedule is an essential part of the financial model without which it would be
hard to produce forecasted financial statements in a way that is fully integrated.
Particularly, the debt schedule equips the analyst/investment banker to:
1. Derive interest expense and thus complete the forecasted income statement from
EBIT (Operating Income) to Net Income.
2. Complete the forecasted liabilities section of the balance sheet by deriving short
term and long-term debt.
3. Finalize the forecasted financing activities section of the cash flow statement.
The Debt Schedule essentially utilizes free cash flow to make mandatory and optional
(discretionary debt repayments, consequently calculating both beginning and ending
annual balances for each debt tranche.
Interest Expense is linked to the income statement
Ending Balance is linked to the liabilities section of the balance sheet
Paydown/Drawdown is linked to the financing activities section of the cash flow
statement
