In financial modeling, negative cash can occur on the balance sheet if there is no line of credit or “revolver” built into the model. This is not necessarily a problem; however, it is generally considered best practice to model in a line of credit that is automatically used to fund a potentially negative cash balance. CFI’s LBO modeling course covers how to do this, step by step.
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CFI is the official global provider of financial modeling and valuation analyst FMVA Designation. CFI's mission is to help anyone become a world-class financial analyst and has a wide range of resources to help you along the way. In order to become a great financial analyst, below are some additional questions and answers for you to explore further: