Key summary lines of cash flow waterfall

The cash flow waterfall is used to calculate key cash flow lines, which are used in different parts of project finance modelling. Key lines of the cash flow waterfall are:

  • Cash flow available for debt service (CFADS): This is the most significant line which drives all debt repayment calculations and ratios, including debt service coverage ratio (DSCR), project life coverage ratio (PLCR) and loan life coverage ratio (LLCR)
  • Cash flow before funding: This line is useful as a quick check against funding, to ensure that initial construction costs are being met by debt or equity
  • Cash flow available for debt service reserve (or other reserve) account (DSRA)
  • Cash flow available to equity to calculate distributions
  • Net cash flow
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