What will be the impact on cash flow and profit of borrowing (B$)?

Previous period total sale):

% Sales

Previous period Direct Job Costs (Cost of Goods Sold):

Previous period Fixed Costs (Operating and Overhead):

Previous period Break-even Sales:

The usual assumption is that the loan is being taken for a business purpose. That purpose could be for buying equipment or for returning "Additional Paid-In Capital" to the owner. This analysis looks at the annual cash flow and profit implications of such a non-specific loan.

Amount borrowed (B$):

Annual Loan Interest Rate:

Loan Period (in months):

Monthly Payment:

Annual Payments:

Average annual cost of loan:

Annual cash flow effect of borrowing:

Average annual decrease in profit for interest expense:

Can the business cash flow the monthly payments?

Can the business absorb the decrease in profit?

Additional annual sales necessary to cover payment of:

=

Additional annual sales necessary to cover loan cost of:

=

A measure of the additional sales that would have to be made to cover the annual amount of the cash flow decrease and the annual cost of the loan, using current financial information.