Module VI· Revolver & Cash Plug MechanicsBasic
Question
What is a revolver, and what is it used for in the model?
Answer
A revolver is a committed credit facility used for short-term liquidity needs. In a model, it acts as a cash plug: if cash falls below minimum cash, the revolver draws; if excess cash is available, the revolver repays first. It supports seasonality, working-capital swings, and downside liquidity.