Which of the following are components of sources of funds defined relative to EBITDA turns?

Which of the following are components of sources of funds defined relative to EBITDA turns?

• A. Excess Cash
• B. Revolver
• C. Term Loan A
• D. All of the Above

Answer: (D)

In an EBITDA-turns framework, sources of funds are all the available cash and facilities that can be tapped to support operations, debt service, or capital needs. Excess cash is the cash on hand beyond what’s reserved, so it’s immediately usable and directly expands liquidity. The revolver represents undrawn capacity on a revolving credit facility, which acts as a flexible line you can draw from if shortfalls arise, adding to the pool of available funds. Term Loan A is a debt facility that can be drawn when needed, increasing the amount of cash available to fund uses. Because each of these provides a way to access cash or liquidity to support the business, they all count as sources of funds under EBITDA-turns considerations. Therefore, all of the above is the correct idea.

In an EBITDA-turns framework, sources of funds are all the available cash and facilities that can be tapped to support operations, debt service, or capital needs. Excess cash is the cash on hand beyond what’s reserved, so it’s immediately usable and directly expands liquidity. The revolver represents undrawn capacity on a revolving credit facility, which acts as a flexible line you can draw from if shortfalls arise, adding to the pool of available funds. Term Loan A is a debt facility that can be drawn when needed, increasing the amount of cash available to fund uses. Because each of these provides a way to access cash or liquidity to support the business, they all count as sources of funds under EBITDA-turns considerations. Therefore, all of the above is the correct idea.