Finance When and how is current debt paid off?


The number in the Due This Year Cell of the Finance area's Current Debt area is driven by three sources:

  • Last round’s Current Debt: You borrowed a short term note by entering an amount in the cell labeled Borrow ($000).
  • Bonds that have matured: If a bond matured at the end of last round, you borrowed additional Current Debt debt to pay the bondholders. In effect, at the end of last year, you converted the face value of the Bond into Current Debt.
  • Emergency Loans. If you ran out of cash at the end of the round, Big Al covered your bills and he wants his money now, January 1 of the current round.
For example, suppose at the beginning of last round (January 1 of last year) you borrowed $3 million of Current Debt at a rate (stated on the Finance worksheet) of 10%. You had a Bond due at the conclusion of the round (December 31) with a face value of $7 million. Your sales forecasts were over-optimistic: Sales didn't materialize, your inventory swelled, and you needed a $10 million emergency loan from Big Al (Big Al charges your short-term rate plus 7.5%).