Excess Cash Flow Calculation Template
One document and four sheets that trace every addition and deduction to its own clause in the credit agreement.
Free download · No account needed
A generic Excess Cash Flow formula subtracts capex, cash interest, cash taxes and scheduled amortization from EBITDA, then multiplies by a flat percentage. One attorney and CPA's own breakdown of the mechanic confirms there is no accounting standard behind the term. Some agreements start from EBITDA and deduct interest and taxes separately. Others start from Consolidated Net Income, which already has both subtracted out, so applying the wrong base double-counts a deduction and every later number inherits the error.
The mechanics are real, not a modeling convention. CACI International's own October 2024 credit agreement sets its Excess Cash Flow Percentage at 50%, stepping to 25% once leverage falls to 3.00 times and to 0% below 2.50 times. Both tiers are tested fresh each fiscal year end, not carried forward, and net against voluntary prepayments already made that year. Talbridge Components, Inc., a fictional industrial manufacturer, closes FY2025 at 2.80 times leverage on $22,400,000 of EBITDA, dropping its own agreement's tier from 50% to 25%.
Talbridge's build-up nets $13,610,000 of additions against $5,570,000 of deductions, each lettered to its own clause, for $8,040,000 of Excess Cash Flow. Twenty-five percent of that is $2,010,000, less $750,000 already prepaid voluntarily, leaving $1,260,000 due. A generic calculation carrying last year's 50% forward and skipping the netting sends $3,545,000, a $2,285,000 overpayment. The pack builds the Calculation Basis Note and three sheets from the agreement's clauses, beside the lender covenant reporting package for the leverage math setting the tier.
What's in the pack
ECF Build-up
Every addition and deduction lettered to its own clause in the credit agreement, not a generic EBITDA-minus-capex formula.
Permitted Deductions
A ledger of every addition and deduction with its supporting document and the reason it qualifies under that specific clause.
Prepayment Schedule
Nets voluntary prepayments dollar for dollar, then applies the balance against scheduled amortization and states the exact due date.
Historical ECF
Three fiscal years of leverage, the percentage tier each one set, and the cumulative mandatory prepayment total.
Calculation Basis Note
The number, the clause behind each line, and the gap a generic formula would have sent to the lender.
How to use it
- 1
Take it blank, or worked
Download the empty Word and CSV files with no signup, or open the pack in River and hand it the credit agreement and the annual accounts instead of building four sheets by hand.
- 2
Send the agreement and the accounts
The prepayment provision, every amendment, and the fiscal year's financial statements. That alone builds the additions and deductions with each one's own clause, not a guessed default.
- 3
Set the percentage and net it
River tests this year's leverage ratio against the step-down grid, applies the percentage that tier actually sets, and nets out whatever you already prepaid voluntarily during the year.
- 4
Refresh it every fiscal year end
Leverage moves, deductions change, and last year's percentage does not carry forward. Rerun the pack each fiscal year close so the mandatory prepayment always traces to this year's own numbers.
Frequently asked questions
Is this template free?
Yes. The whole pack comes down as a Word document and CSV sheets, no signup and no card. Edit with AI is the optional route for anyone who would rather hand River the credit agreement and the annual accounts than build four sheets from scratch. The rest of the library is at free templates.
What is the de minimis threshold, and does my facility actually have one?
Most sponsor-backed agreements set a dollar floor below which no prepayment is due even when the build-up is positive. CACI International's own facility sets that floor at $25,000,000. Talbridge's smaller illustrative facility sets it at $500,000. Skip the check, and a build-up that clears the floor looks the same as one that never should have owed anything.
Does every change in working capital count toward the addition or deduction?
Not automatically. CACI International's own credit agreement excludes working capital swings caused by a GAAP reclassification between current and noncurrent, purchase accounting effects, and fluctuations in accrued obligations under swap contracts, since none of those move cash. The pack tests each period's swing against the same kind of carve-out before it lands on the Permitted Deductions ledger.
What happens if I already prepaid voluntarily during the year?
It nets dollar for dollar against the mandatory amount, which is the step a generic formula skips. Talbridge prepaid $750,000 voluntarily against the same tranche during FY2025, so the $2,010,000 the percentage alone produces drops to the $1,260,000 actually due. Skip this step and the lender is overpaid by the full voluntary amount.
How does this connect to the EBITDA and leverage definitions I already certify?
Often from the same base. Run the credit agreement through the loan agreement EBITDA definition extractor first if the add-backs behind your leverage ratio are in dispute. The Applicable ECF Percentage tier and the leverage covenant are frequently keyed to the identical Consolidated EBITDA figure.
Where does the debt figure in the leverage ratio come from?
From every loan and lease on the books, each scheduled on its own agreement. The debt schedule and maturity pack keeps that register current, and its total funded debt is exactly the number a First Lien Net Leverage Ratio needs once a term loan amortizes or a new instrument is added mid-year.
Can I see the percentage step down before the fiscal year actually closes?
Yes. The covenant headroom forecast projects the same leverage ratio forward by quarter, so a borrower approaching a leverage breakpoint can see the tier drop coming before the year end rather than discovering it only when the audited financials are final.
Trace the sweep to the clause that actually requires it
Download the blank pack as a Word document and CSV files, or open it in River and let the agent build the calculation from your own credit agreement and financial statements.
Edit with AI