Sometimes you need a short, practical explanation of a project finance technique, not a 300-page textbook. That is why we built our library of free financial modelling tutorials: each one breaks a technical concept down into a short read you can apply straight away.
There are more than 20 tutorials in the library, and the five below come with an Excel workbook, so you can follow along and apply the method in a working spreadsheet. These are the five our readers download most.
1. Debt service coverage ratio (DSCR) tutorial
The DSCR is fundamental in project finance. This tutorial covers:
- What the DSCR measures and why lenders focus on it
- How to calculate the DSCR correctly in a model
- What a healthy DSCR looks like in different sectors
2. Debt service reserve account (DSRA) tutorial
The DSRA is a cash safety net for lenders. This tutorial covers:
- What the DSRA is for and how it protects lenders
- Methods for sizing the reserve
- The Excel logic to model DSRA movements correctly
3. Cash flow available for debt service (CFADS) tutorial
CFADS is the foundation for every debt calculation in the model. This tutorial explains:
- Why CFADS is not the same as EBITDA
- How to derive CFADS in the model, step by step
- How CFADS links directly to lender decisions
4. Features of a cash flow waterfall tutorial
The cash flow waterfall decides who gets paid, in what order and with what priority. This tutorial covers:
- The standard order of cash movements
- How reserves, distributions and debt repayment are treated
- Why clear logic makes a model easier to audit and to follow
Read the cash flow waterfall tutorial
5. Loan life coverage ratio (LLCR) tutorial
The LLCR gives lenders a long-term view of repayment capacity. This tutorial covers:
- How the LLCR differs from the DSCR and the PLCR
- When the LLCR carries most weight in negotiations
- How to model the LLCR correctly without circular calculations
How our tutorials preview our financial modelling training courses
Each of these tutorials is a short extract of how we teach structured, industry-standard modelling on our financial modelling training courses. The tutorials are written by modellers who build and audit project finance models for a living.
Where to find all our financial modelling tutorials
These five are a good place to start on the project finance fundamentals. For the rest, browse the full library of financial modelling tutorials.