Four examples of the work Luvima can prepare for management, boards and lenders.
01 · Financial modelling
Operating and funding model
How much cash does the business generate after debt service, and how much room remains under its lending covenant?
The operating forecast connects to the funding plan and debt schedule. This summary shows how cash available for debt service, repayments and closing cash fit together.
LUVIMA01 / Model summary
Fictional example · CAD millions, except ratios
Annual operating, debt and cash forecast
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Metric
2027E
2028E
2029E
2030E
Revenue
$12.00
$13.00
$14.00
$15.00
EBITDA
$5.40
$6.00
$6.60
$7.20
EBITDA margin
45.0%
46.2%
47.1%
48.0%
Cash available for debt service
$3.30
$3.60
$4.10
$4.60
Debt service (interest + principal)
$2.64
$2.60
$2.80
$3.00
Principal repayment
$1.50
$1.80
$2.00
$2.20
Closing debt
$16.50
$14.70
$12.70
$10.50
Opening cash
$4.00
$4.66
$5.66
$6.96
Closing cash
$4.66
$5.66
$6.96
$8.56
Debt-service coverage ratio
1.25×
1.38×
1.46×
1.53×
Headroom above 1.15× covenant
0.10×
0.23×
0.31×
0.38×
Sources of funds
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Source
Amount
Senior debt
$12.00
Subordinated debt
$6.00
Equity and capital contributions
$23.00
Total
$41.00
Uses of funds
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Use
Amount
Equipment
$24.00
Construction
$10.00
Fees and contingency
$3.00
Opening cash reserve
$4.00
Total
$41.00
Cash available for debt service is after tax, working capital and maintenance capital spending. Closing cash assumes no distributions or additional financing. DSCR = cash available for debt service ÷ debt service.
Decision to consider
The narrowest covenant headroom is 0.10× in 2027. Add a monthly cash forecast to test funding requirements within the year.
02 · Financing decisions
Scenario review
Can the project meet its lending covenant if demand falls and costs rise?
Each scenario changes several assumptions together. The results help management decide which risks to address before agreeing financing terms.
LUVIMA02 / Scenario review
Fictional example · CAD millions, except ratios
Operating assumptions and model outputs
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Assumption / output
Base
Downside
Severe
Demand vs base
100%
92%
85%
Annual cost inflation
2.5%
4.0%
6.0%
Funding rate
6.0%
7.0%
8.0%
Minimum DSCR
1.42×
1.18×
0.96×
Headroom vs 1.20× covenant
0.22×
−0.02×
−0.24×
DSCR means debt-service coverage ratio. Outputs illustrate a separate project model; the full cash-flow and debt schedules are not shown here.
Decision to consider
The downside case breaches the 1.20× covenant. Test lower debt, additional equity or revised repayment timing before committing to the funding structure.
03 · Board reporting
Cash and performance report
What has changed since the last board meeting, and what needs a decision?
The board sees the cash forecast alongside trading performance and overdue receivables. Commentary distinguishes the forecast from the actions proposed to improve it.
Approve a temporary hold on non-essential spending through September. Assign collection owners for overdue balances and review the cash forecast monthly. The $2.2m low point excludes any benefit from these proposed actions.
04 · Liquidity planning
13-week cash forecast
When will cash fall below the minimum operating balance?
Weekly receipts and payments reveal a funding need that a monthly report can hide. Cash crosses the threshold in week seven and reaches its low in week eight.
Arrange access to at least $0.27m before week seven to maintain the $0.75m minimum balance in this forecast. Test further collection delays to determine the additional contingency required.
Need a model or report for your business?
Tell us what you need to decide and when. We can discuss the information available and the work required.