Acquisition Projections Builder
Five Years, Year by Year
Year-1 DSCR
2
After the owner salary, the lender convention
Weakest-Year DSCR
2
The year a lender asks about first
Stressed at +2 Points
1.84
Weakest-year coverage if the floating rate steps up; lenders run this before approving
Free Cash, 5 Years
$995,284
After salary, debt, and the capex reserve
The weakest year clears the 1.25 lenders commonly screen at, and holds it through a 2-point rate step. That is the coverage question answered; the earnings assumption underneath it is the one still worth arguing with.
| Year | SDE | Debt Service | Free Cash | DSCR | Loan Balance |
|---|---|---|---|---|---|
| 1 | $510,000 | $205,215 | $179,285 | 2 | $1,262,744 |
| 2 | $520,200 | $205,215 | $188,975 | 2.05 | $1,167,303 |
| 3 | $530,604 | $205,215 | $198,859 | 2.1 | $1,062,909 |
| 4 | $541,216 | $205,215 | $208,941 | 2.15 | $948,722 |
| 5 | $552,040 | $205,215 | $219,224 | 2.2 | $823,824 |
Year One, Month by Month
Debt service is level while revenue is not. Pick the shape closest to the trade; the shapes are stated simplifications, not forecasts.
Months Running Negative
0
Months where the level debt and draw outrun the season
Deepest Cash Hole
$0
The working capital to have at close before the strong season repays it
| Month | SDE | Debt | Draw + Capex | Net | Cumulative |
|---|---|---|---|---|---|
| 1 | $42,500 | $17,101 | $10,458 | $14,940 | $14,940 |
| 2 | $42,500 | $17,101 | $10,458 | $14,940 | $29,881 |
| 3 | $42,500 | $17,101 | $10,458 | $14,940 | $44,821 |
| 4 | $42,500 | $17,101 | $10,458 | $14,940 | $59,762 |
| 5 | $42,500 | $17,101 | $10,458 | $14,940 | $74,702 |
| 6 | $42,500 | $17,101 | $10,458 | $14,940 | $89,643 |
| 7 | $42,500 | $17,101 | $10,458 | $14,940 | $104,583 |
| 8 | $42,500 | $17,101 | $10,458 | $14,940 | $119,523 |
| 9 | $42,500 | $17,101 | $10,458 | $14,940 | $134,464 |
| 10 | $42,500 | $17,101 | $10,458 | $14,940 | $149,404 |
| 11 | $42,500 | $17,101 | $10,458 | $14,940 | $164,345 |
| 12 | $42,500 | $17,101 | $10,458 | $14,940 | $179,285 |
The Quarter, Week by Week
Lowest Point
$26,000
Week 1 of thirteen
Cash at the End
$38,000
$494,000 in, $516,000 out
Runs Out
Not this quarter
The account stays positive throughout
The account never goes negative, but week 1 leaves less than one week of costs in it. That is a quarter with no room for a late payer.
| 1 | $38,000 | $72,000 | -$34,000 | $26,000 |
| 2 | $38,000 | $14,000 | $24,000 | $50,000 |
| 3 | $38,000 | $48,000 | -$10,000 | $40,000 |
| 4 | $38,000 | $14,000 | $24,000 | $64,000 |
| 5 | $38,000 | $72,000 | -$34,000 | $30,000 |
| 6 | $38,000 | $14,000 | $24,000 | $54,000 |
| 7 | $38,000 | $48,000 | -$10,000 | $44,000 |
| 8 | $38,000 | $14,000 | $24,000 | $68,000 |
| 9 | $38,000 | $72,000 | -$34,000 | $34,000 |
| 10 | $38,000 | $14,000 | $24,000 | $58,000 |
| 11 | $38,000 | $48,000 | -$10,000 | $48,000 |
| 12 | $38,000 | $14,000 | $24,000 | $72,000 |
| 13 | $38,000 | $72,000 | -$34,000 | $38,000 |
Weekly rather than monthly on purpose: a business can clear its costs across a month and still miss payroll in the week the loan payment and an insurance renewal land together, which is exactly what a monthly view averages away. The loan payment lands every fourth week and a two-week payroll in the odd ones, so read the trough as the shape of the quarter rather than as a date. If it goes negative, the first row of the year-one troubles is the move.
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