Covenant Headroom Quick Reference
Recall the covenant headroom checks that support timely escalation.
What is covenant headroom? The cushion between the forecast or actual covenant result and the required threshold. Headroom should be shown in ratio terms and in business-driver terms, such as EBITDA dollars or debt dollars. Core recall Actual headroom versus forecast headroom Both matter Actuals support compliance. Forecasts protect time to act. The controller says: EBITDA add-backs are accounting's issue. EBITDA add-backs are accounting's issue; treasury can use the final number later. Waiting for final support can leave too little time for lender communication if headroom compresses. Your line Accounting owns support, but treasury is accountable for covenant submission. I…
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