All cases
Apply a logistics buyout’s annual cash sweep
Model debt paydown and exit equity · Fictional case
The situation
After mandatory amortization, debt outstanding is ₹22 crore. Cash available before the sweep is ₹18 crore. The agreement keeps a ₹6 crore liquidity reserve and sweeps 60% of the remainder.
Your task
What extra principal is paid and what remains?
Reveal step-by-step solution
Set up the problem
Eligible excess cash = max(₹18 − ₹6, 0) = ₹12 crore.
Work through the numbers
Sweep = min(60% × ₹12, ₹22) = ₹7.2 crore.
Interpret the result
Debt falls to ₹14.8 crore and cash remaining is ₹10.8 crore. The reserve is preserved.
What to remember
Apply the contractual excess cash definition after mandatory service and cap the sweep at outstanding principal.