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Leveraged Finance Excel Model Template

The document presents a leveraged finance template that includes various scenarios of project financing with differing levels of leverage. It outlines five examples, illustrating the impact of equity and debt on cash flows and internal rate of return (IRR) for both successful and unsuccessful projects. The analysis assumes no taxes or debt repayments for simplicity.

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13 views2 pages

Leveraged Finance Excel Model Template

The document presents a leveraged finance template that includes various scenarios of project financing with differing levels of leverage. It outlines five examples, illustrating the impact of equity and debt on cash flows and internal rate of return (IRR) for both successful and unsuccessful projects. The analysis assumes no taxes or debt repayments for simplicity.

Uploaded by

innaz7124
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

Leverage Finance Template Strictly Confidential

Table of Contents

Leveraged Finance

© 2015 to 2023 CFI Education Inc.


This Excel model is for educational purposes only and should not be used for any other reason. All content is Copyright material of CFI Education Inc.
All rights reserved. The contents of this publication, including but not limited to all written material, content layout, images, formulas, and code, are protected
under international copyright and trademark laws. No part of this publication may be modified, manipulated, reproduced, distributed, or transmitted in any
form by any means, including photocopying, recording, or other electronic or mechanical methods, without prior written permission of the publisher,
except in the case of certain noncommercial uses permitted by copyright law.

[Link]
Leveraged Finance Example

#1 No Leverage – Successful Project


Equity 10,000
Debt –
Total Capital 10,000
Interest Rate on Debt –

Pre-interest Cash Flows 3,500 3,500 3,500 3,500 3,500


Interest Expense – – – – –
Equity Cash Flows (after interest expense (10,000) 3,500 3,500 3,500 3,500 3,500
IRR 22%

#2 Moderate Leverage – Successful Project


Equity 7,000
Debt 3,000
Total Capital 10,000
Interest Rate on Debt 6.0%

Pre-interest Cash Flows 3,500 3,500 3,500 3,500 3,500


Interest Expense (180) (180) (180) (180) (180)
Equity Cash Flows (after interest expense (7,000) 3,320 3,320 3,320 3,320 3,320
IRR 38%

#3 High Leverage – Successful Project


Equity 4,000
Debt 6,000
Total Capital 10,000
Interest Rate on Debt 8.0%

Pre-interest Cash Flows 3,500 3,500 3,500 3,500 3,500


Interest Expense (480) (480) (480) (480) (480)
Equity Cash Flows (after interest expense (4,000) 3,020 3,020 3,020 3,020 3,020
IRR 70%

#4 No Leverage – Unsuccessful Project


Equity 10,000
Debt –
Total Capital 10,000
Interest Rate on Debt –

Pre-interest Cash Flows (3,500) (3,500) (3,500) 3,500 2,500


Interest Expense – – – – –
Equity Cash Flows (after interest expense (10,000) (3,500) (3,500) (3,500) 3,500 2,500
IRR (32%)

#5 High Leverage – Unsuccessful Project


Equity 4,000
Debt 6,000
Total Capital 10,000
Interest Rate on Debt 8.0%

Pre-interest Cash Flows (3,500) (3,500) (3,500) 3,500 2,500


Interest Expense (480) (480) (480) (480) (480)
Equity Cash Flows (after interest expense (4,000) (3,980) (3,980) (3,980) 3,020 2,020
IRR (35%)

Note: this analysis assumes no taxes (or interest tax shield), nor any debt repayments for simplicity.

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