Balancing debt, growth, and a potential windfall.
David's company boasts $2M in ARR, but aggressive growth required taking on $300,000 in debt to scale infrastructure. He worries about maintaining a healthy Debt Service Coverage Ratio (DSCR) amidst fluctuating monthly revenues and potential acquisition offers. Failure to manage debt effectively could jeopardize both his company's valuation and his personal financial stability.
Using Golden Door Asset's Debt Service Coverage Ratio Calculator, David can project his DSCR under various revenue scenarios and debt repayment plans. The calculator helps him determine the maximum debt his company can comfortably handle and identify key performance indicators (KPIs) to monitor. For example, he discovered that a 15% dip in MRR would push his DSCR below 1, signaling an urgent need to renegotiate loan terms or secure additional capital.
The DSCR calculator allows for inputting various revenue streams, debt obligations, and interest rates to generate a dynamic projection. Users can adjust these parameters to stress-test their financial position under different market conditions.
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