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Short Term Debt and Resolving Credit Line

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In order to find out how much cash is available to pay down short term debt, such as a revolving credit line, you must take:

1. Cash inflows from operations + Cash outflows for investments + Financing cash flows + beginning cash balance
2. Beginning cash balance + pre-debt cash flows -" Min. cash balance-" Required payments of LT and other debt
3. Beginning cash balance + cash inflows from operations - Min. cash balance
4. Beginning cash balance + cash inflows from operations + Cash outflows for investments - Min. cash balance

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Solution Summary

This solution explains the correct method to determine how much cash is available to pay down short term debt.

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4. Beginning cash balance + cash inflows from operations + Cash outflows for investments - Min. cash balance

We'd take the beginning cash balance ...

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