The situation
A fictional Ahmedabad supplier has ₹8 crore available cash and must pay ₹13 crore before collections. It requests ₹10 crore revolving credit. Annual service on existing debt is ₹15 crore. Base annual CFADS is ₹24 crore and downside CFADS is ₹18 crore. Assume an incremental ₹1 crore annual service cost for a ₹5 crore facility. The lender requires 1.25× DSCR and does not assume additional collateral or a waiver.
1. Work out the numbers
What draw covers the immediate cash gap?
2. Make the decision
Which recommendation respects both tests?
Complete the calculation above to unlock this decision.