Module VI· Revolver & Cash Plug MechanicsAdvanced
Question
How do you model revolver drawdown for seasonality in quarterly models?
Answer
Quarterly models should reflect seasonal working-capital swings. Forecast AR, inventory, AP, and cash flow by quarter. If cash falls below minimum during seasonal build, revolver draws; during seasonal release, cash repays revolver. Annual models can miss peak liquidity needs, so quarterly revolver sizing is important.