easy · Corporate Credit Analysis fsa
A company has $350 million in available liquidity (cash + undrawn revolver) and faces a stressed monthly cash burn of $25 million.
What is its liquidity runway, and how is it likely to be viewed by a credit analyst?
- 8.75 months; treated as a highly distressed liquidity position
- 1.4 months, signaling an imminent risk of default
- 14 months; generally manageable but requires monitoring
- 35 months, indicating an exceptionally strong liquidity cushion
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