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Build a commercial credit worksheet for related businesses using ownership shares and matched transfers. Work from supplied cash-generation and debt-service schedules to a combined coverage ratio, with checks against double counting.
Global cash flow combines cash generation and debt service across the businesses and support parties relevant to a commercial borrower. Its purpose is to show the relationship's repayment capacity without counting the same cash twice. It is a credit worksheet, with inclusion assumptions that need review, rather than a worldwide cash-market measure.
The OCC's commercial real estate lending handbook includes global cash flow among the factors for evaluating borrower and guarantor financial condition. The worksheet below applies that idea to related US businesses; personal cash flows are outside this example.
Global debt-service coverage = Included cash available for debt service / Included scheduled principal and interest
Define cash available consistently: external operating cash receipts less cash operating costs, cash taxes and required capital spending, before the principal and interest included in the denominator. Adjust a starting schedule if it already deducts interest. Keep debt proceeds and asset-sale proceeds separate from recurring generation.
Identify the entities, reporting year, ownership, guarantees, transfer restrictions and inclusion basis. A percentage ownership interest does not automatically establish access to cash or limit a guarantee. The broader cash flow lending discussion covers the lending approach; this worksheet focuses on combining supplied schedules.
Bring each entity's cash-generation worksheet, debt-service schedule and intercompany transaction register for the same period. Debt rows need principal due, interest due, maturity, obligor and any guarantee. Transfer rows need payer, recipient, amount, date and a matching reference.
Separate two common transfer problems. Rent paid by one included entity and received by another appears on both sides of their operating schedules. A distribution received by a parent can instead duplicate cash already counted in the subsidiary's generation before distributions.
The period must match your cash flow forecast if you are assessing future repayment capacity. Do not mix historical generation with next year's scheduled debt without labeling that comparison.
Fictional US borrower Cedar Services supplies the following annual schedules, in USD. Property LLC is fully included; Supply LLC is included at 60% for both cash and debt under this illustrative worksheet assumption. The analyst must separately validate that assumption against legal obligations and available distributions.
Cash supplied is after internal rent but before owner distributions. Cedar's cash includes a $60,000 distribution received from Supply. Cedar also paid $120,000 rent to Property, which included the receipt.
Use these columns in a spreadsheet, with headers in row 1 and entities in rows 2–4:
| A: Entity | B: Included share | C: Supplied cash (USD) | D: Internal rent paid (USD) | E: Internal rent received (USD) | F: Duplicate distribution received (USD) | G: Full debt service (USD) |
|---|---|---|---|---|---|---|
| Cedar Services | 100% | 400,000 | 120,000 | 0 | 60,000 | 220,000 |
| Property LLC | 100% | 300,000 | 0 | 120,000 | 0 | 180,000 |
| Supply LLC | 60% | 180,000 | 0 | 0 | 0 | 100,000 |
In H2 calculate adjusted included cash. In I2 calculate included debt service, then fill both formulas down through row 4:
H2 =(C2+D2-E2-F2)*B2
I2 =G2*B2
The result is:
| Entity | Cash calculation (USD) | Included cash (USD) | Included debt service (USD) |
|---|---|---|---|
| Cedar Services | (400,000 + 120,000 − 60,000) × 100% | 460,000 | 220,000 |
| Property LLC | (300,000 − 120,000) × 100% | 180,000 | 180,000 |
| Supply LLC | 180,000 × 60% | 108,000 | 60,000 |
| Total | 748,000 | 460,000 |
Rent eliminations cancel because both counterparties are fully included. The $60,000 distribution receipt is removed once because Supply's generation was measured before paying it. Adjusted entity amounts serve the combined calculation; they do not describe each entity's actual bank cash availability.
Use these formulas for the combined coverage ratio and cash remaining after included debt service:
=SUM(H2:H4)/SUM(I2:I4)
=SUM(H2:H4)-SUM(I2:I4)
Coverage is 748,000 / 460,000 = 1.63 times, rounded to two decimals. Remaining cash is 748,000 − 460,000 = $288,000, before any other uses excluded by the stated definition.
An independent cash proof is 400,000 + 300,000 + (180,000 × 60%) − 60,000 = $748,000. The rent elimination adds no cash. Debt service must tie to 220,000 + 180,000 + (100,000 × 60%) = $460,000.
If the relationship must support all Supply debt service, include $100,000 rather than $60,000. Total debt service becomes 220,000 + 180,000 + 100,000 = $500,000; the same $748,000 numerator produces 1.50 times, rounded. This shows why a cash flow leverage assessment needs the actual obligation scope, not an ownership shortcut.
The FDIC's lending examination manual, in its receivables-lending discussion, calls for analyzing borrower financial statements even when collateral is good and exceeds the loan. A combined coverage ratio likewise supports the review; it does not replace checking individual entities.
Retain unadjusted schedules to examine local obligations, cash restrictions and distribution capacity. Match each eliminated transfer to its counterparty entry. Confirm whether cash can reach the borrower when payments fall due, rather than relying only on annual totals.
Upload your cash-generation, debt-service and transfer schedules with inclusion assumptions supplied by your credit team. Covirage maps the columns; its tools compute and check the combined figures, while the external AI model explains the result with every figure traced to its rows. Create a free Covirage account and bring a sample of your own data.
See Covirage for commercial banking for the industry context.
No. Global cash flow is a credit-analysis worksheet whose scope follows the lending relationship and documented assumptions. A consolidated cash-flow statement follows financial-reporting rules. Ownership, guarantees and access to cash can make the entities and amounts included in the two analyses different.
An ownership percentage is an input to review, not a universal inclusion rule. Distribution rights, guarantees, restrictions and lender policy can require a different treatment. State the basis for both cash inclusion and debt inclusion, and do not scale obligations down merely because ownership is partial.
When the source entity's cash generation is already included before its distribution, adding the recipient's distribution income counts the same cash again. Remove that duplicated receipt once. If source cash is reported after the distribution, first put both schedules on a consistent basis.