Cash flow estimates


The cash flow estimates are essential to ensure availability of cash to meet the requirements of the project from time to time. The cash flow estimates will show the sources of funds including those arising from depreciation and profits as well as uses of funds including repayment of term loan installments. The debt service coverage ratio is arrived at by dividing cash accruals comprising net profits by total interest charges and installments. This will indicate whether the cash flow would be adequate to meet the debt obligations and also provide sufficient margin of safety, repayment of term loans beings drawn taking into consideration the above aspect.

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