The cashflow waterfall model ensures that each cashflow item occurs at the correct seniority to the other items
A projects cashflow can be summarised using a cashflow waterfall
This shows the priority of each cash inflow and outflow
The cashflow waterfall is important when illustrating debt repayments of many debt tranches with reducing seniority


Categories
All cashflow items are placed in the order in which they occur. The main ones in order of occurrence are:
Revenues - operating and other income
Expenses - operating and capital expenses
Tax
Debt Service (principal repayments and interest paid)



CFADS - Cashflow Available for Debt Service
DSCR - Debt Service Coverage Ratio
PLCR - Project Life Coverage Ratio
LLCR - Loan Life Coverage Ratio



The cashflow statement does not order cashflows in order of seniority and is therefore less efficient when analysing a projects debt repayment ability.






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