How much additional debt is supported by your chosen constraints?

Define the source, date and limits

All monetary amounts below are EURk: 1 EURk = EUR 1,000. Native model files store base-currency EUR; choose EUR and the thousands display unit to reproduce these tables. All businesses, balances and financing terms are synthetic.

The synthetic company has cash of 20 and gross debt of 200. EBITDA is 100 in 2026, 80 in 2027 and 60 in 2028. Gross Debt / EBITDA must be at most 3.0×; Net Debt / EBITDA must be at most 2.5×. The basis is Reported. Debt and cash are closing balances; earnings use trailing twelve months.

Download the supported-debt model. Interest and tax are zero. Investment equals EBITDA in each year, keeping modeled cash at 20; this isolates the earnings effect rather than assuming that lower EBITDA leaves cash unchanged automatically. No extra debt is drawn when a capacity number is calculated.

Reconcile the two debt ceilings

Gross-leverage ceiling: maximum gross debt = 3.0 × EBITDA. Net-leverage ceiling: maximum gross debt = 2.5 × EBITDA + cash. At EBITDA of 100 the ceilings are 300 and 270. The lower 270 binds, leaving 270 − 200 = 70 of additional capacity.

At EBITDA of 80 the ceilings fall to 240 and 220, leaving only 20 additional capacity. At EBITDA of 60, the binding ceiling is 170: additional capacity is zero and required deleveraging is 30. Negative capacity is not presented as a loan. The first annual constrained observation in this example is 31 December 2028.

Reproduce the decision at a defined period

1. Open Credit & Liquidity → Debt Capacity & Covenants. Select the Reported basis and inspect the annual observation for 2026.
2. Add or inspect the gross-leverage ceiling of 3.0× and net-leverage ceiling of 2.5×. Confirm their numerator, denominator and direction.
3. Review the binding constraint and its observation date, then compare 2027 and 2028. Use the same closing cash and debt scope across both constraints.
4. If adding interest-coverage capacity, enter the marginal interest-rate assumption. Review every unresolved constraint rather than silently ignoring it.

When a result is unavailable or blocked

Nonpositive EBITDA cannot support a leverage-based ceiling. The native calculation marks that constraint blocked and does not turn division by zero into unlimited capacity. Observations without a full twelve months of model history have unavailable trailing metrics. Zero interest likewise makes an interest-coverage ratio N/M; it is not an infinite ratio to report.

This example assumes new borrowing is deployed, so existing modeled cash is held fixed in the capacity calculation. It does not count newly borrowed cash again to inflate net-leverage capacity. Required deleveraging is the amount indicated under that convention; an actual debt repayment must separately be modeled with its cash effects.

Minimum Cash is a linked gate, not an independent debt ceiling. Capacity does not assign a rating, approve a credit offer or determine a suitable ratio. The constraint reference documents the supported assumptions.

Move from supported debt to the next question

To test an actual threshold on scheduled dates, use covenant headroom. To identify resources that can be drawn today, use available liquidity vs cash. The metric reference explains the source definitions. Treasury review must also consider liquidity and financing decisions; the ACT’s board-question guidance provides professional context, not a validation of these illustrative limits.