Reading the debt schedule.
A borrowing balance tells you how much is outstanding. To place the borrowing in a cash forecast, you also need to know what is payable and when.
Read the scheduled principal.
An illustrative term loan has $180,000 of principal outstanding. Its agreed schedule requires six monthly principal payments of $10,000, followed by the remaining $120,000 at maturity. Interest is payable separately.
Showing only the monthly $10,000 would miss the maturity payment. Spreading the $180,000 evenly over an arbitrary forecast period would invent a different agreement. The schedule should follow the actual terms, including the final payment.
Keep principal, interest and fees distinguishable.
Principal reduces the borrowing balance. Interest and fees have separate calculation bases and payment dates. A forecast needs those cash payments even when the accounting presentation puts them in different places.
For a variable-rate facility, state the rate assumption used. A later change in that assumption should be traceable through the payment schedule. Do not label a calculated interest amount as a lender-confirmed charge.
Show available borrowing separately from bank cash.
A facility limit and its undrawn amount are not the same as money in the bank. Use of the facility may depend on a borrowing base, conditions or other restrictions in the agreement.
A useful schedule identifies the amount drawn, the stated limit, relevant availability assumptions and the dates on which payments fall due. A proposed extension remains a separate scenario until the provider has agreed to it.
An annotation beside the maturity.
For the illustrative loan, a note could read: “$120,000 principal due at maturity, in addition to the six scheduled $10,000 principal payments. Interest is shown separately using the stated forecast assumption. No refinancing receipt is included in the base forecast.”
The agreement and lender statements still need to support the dates and amounts. Any uncertainty over the meaning of a term should go to the appropriate legal or accounting adviser before it is treated as settled.