Debt lives in two instruments here, and the separation matters. The term loan is scheduled debt. It amortizes ₹25 cr a year by contract, whatever cash does. The revolver, built next, is residual debt. It exists to absorb whatever the rest of the model can't fund. Indian houses will recognize the pair instantly as the term loan plus the cash-credit / working-capital limit. That's the bank-sanctioned facility that Indian companies drift in and out of with the working-capital cycle. It's secured on inventory and receivables and priced off MCLR/EBLR. A US model calls the same object a revolving credit facility. One schedule pattern serves both markets.
M rows 82 to 89, with the header in 82:
| M row | Line | Formula in F (fill right) | Note |
|---|---|---|---|
| 83 | Term loan, opening | =E36 | Daisy chain |
| 84 | Repayment | =MIN(F83,A!F57) | Never repay more than exists: the MIN retires the loan gracefully when the balance runs out |
| 85 | Term loan, closing | =F83-F84 | |
| 86 | Interest, term loan | =F83*A!F58 | Opening balance × 9% |
| 87 | Interest, revolver | =F93*A!F59 | Opening revolver × 10% (row 93 arrives with the revolver and cash sweep) |
| 88 | Total interest expense | =F86+F87 | |
| 89 | Interest income on cash | =F98*A!F60 | Opening cash × 4% (row 98 comes with the revolver and cash sweep) |
Link the income statement: F17 =F88 and F18 =F89, filled right. Now the income statement is complete from top to bottom, with everything below EBIT live. If you left out the tax formula, =MAX(F19,0)*A!F56 from the history map, enter it now.
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Why does a debt schedule charge interest on opening balances?
Opening balances are what keep the model acyclic. Interest for the year should accrue on the balance as it moves through the year, which means an average. But this year's closing balances depend on this year's cash flows, which depend on net income, which depends on interest, which would depend on closing balances. That's a real simultaneous equation, the same one you saw on paper. Charging interest on opening balances is the standard first-build treatment. Opening balances are last year's closings, already known and fully computed, so every arrow in the dependency graph points forward and the model stays acyclic. You pay for it with a timing approximation, because this year's draws pay no interest until next year. Near the end of the build, the circularity section measures that price on this very model. On Kaveri's balance sheet it comes to roughly ₹1 crore of net income, under 1%, with zero effect on whether any check passes. That section then shows you the two upgrades. Build the acyclic model first.
Worked example: Base case interest
Checkpoint 5 (Base). Interest expense FY26 to FY30: 15.8 · 13.5 · 11.3 · 9.0 · 6.8. It's a clean staircase, 9% of an opening balance stepping down 175, 150, 125, 100, 75. Interest income FY26: 3.6 (4% × opening cash 90). Net income: 104.2 · 118.7 · 132.7 · 146.1 · 158.7. PBT FY26: 151.0 − 15.8 + 3.6 = 138.9, and tax is 34.7. If these match, your P&L is done. The balance sheet still fails its check, because cash and the revolver are unbuilt, and row 43's forecast columns should be screaming red right now. Good. That's what checks are for.