Choose cash flow to creditors, interest paid, beginning debt, or ending debt; enter the other three USD amounts for the same period.
Cash Flows to Creditors Formula
The following formula estimates net cash flow to creditors. It assumes the long-term debt balance change reflects cash borrowing less principal repayment; reconcile non-cash changes and reclassifications before using it.
- Where CFC is the cash flow to creditors
- I is the total interest paid
- E is the ending long term debt
- B is the beginning long term debt
To calculate cash flow to creditors, subtract the change in long-term debt (ending long-term debt minus beginning long-term debt) from the total interest paid (equivalently, add beginning long-term debt and subtract ending long-term debt).
| Interest Paid ($) | Beginning Long-Term Debt ($) | Ending Long-Term Debt ($) | Cash Flow to Creditors ($) |
|---|---|---|---|
| 250 | 5,000 | 4,900 | 350 |
| 500 | 10,000 | 9,800 | 700 |
| 750 | 12,000 | 11,500 | 1,250 |
| 1,000 | 25,000 | 24,000 | 2,000 |
| 1,200 | 20,000 | 19,000 | 2,200 |
| 1,500 | 30,000 | 29,000 | 2,500 |
| 2,000 | 40,000 | 38,500 | 3,500 |
| 2,500 | 50,000 | 48,000 | 4,500 |
| 3,000 | 60,000 | 57,500 | 5,500 |
| 3,500 | 70,000 | 67,000 | 6,500 |
| 4,000 | 80,000 | 76,500 | 7,500 |
| 5,000 | 90,000 | 85,500 | 9,500 |
| 6,000 | 100,000 | 95,000 | 11,000 |
| 7,500 | 125,000 | 118,000 | 14,500 |
| 10,000 | 150,000 | 141,000 | 19,000 |
| 12,500 | 200,000 | 190,000 | 22,500 |
| 15,000 | 250,000 | 240,000 | 25,000 |
| 20,000 | 300,000 | 290,000 | 30,000 |
| 25,000 | 400,000 | 380,000 | 45,000 |
| 30,000 | 500,000 | 480,000 | 50,000 |
| Formula: Cash Flow to Creditors = Interest Paid + Beginning Long-Term Debt − Ending Long-Term Debt = Interest Paid − Net New Borrowing. | |||
Cash Flow to Creditors Definition
Cash flow to creditors is the net cash a firm pays to its creditors during a period, typically interest paid plus net repayment of long-term debt (equivalently, interest paid minus net new borrowing).
Cash Flow to Creditors Example
How to calculate cash flow to creditors?
- First, determine the interest paid.
Calculate the total interest paid.
- Next, determine the ending long term debt.
Determine the amount of long term debt at the end of the period.
- Next, determine the beginning long term debt.
Determine the amount of long term debt at the start of the period.
- Finally, calculate the cash flow to creditors.
Calculate the cash flow to creditors using the equation above.
FAQ
This is a financial term used to describe the net cash a firm pays to its creditors during a period, typically interest paid plus net repayment of long-term debt (or interest paid minus net new borrowing).
