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A single-product financing tool that turns five figures from a cost sheet into a clear lending answer: how much this product must sell, this year, to safely carry the loan used to fund it — and whether that number is realistic.
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The Credit Budget calculator (also labelled the debit budget on the tool itself) is a small underwriting worksheet built around one product line. Instead of modelling an entire company, it isolates a single product's price, cost, overhead share, financing cost, and asset share, and works backward from those five numbers to a required sales target.
It belongs to the family of break-even and margin-of-safety techniques long used in bank credit training: rather than asking "will this company be profitable," it asks the sharper question a loan officer actually needs answered — "how much does this specific product have to sell for the credit facility behind it to be safe?"
The calculator exists to turn a lending decision into a sales target that both the bank and the borrower can check against reality. It does this in two linked steps:
The output is a single number — the total annual sales required — that becomes the test of the deal: if the marketing or sales function can credibly reach it, the facility is approved; if not, the bank withholds it.
The calculation runs in five stages once a form is submitted:
Rejects the entry immediately unless the sale price exceeds the unit cost, and unless the product's asset share exceeds both the price and the cost — a guard against unrealistic or mistyped figures before any budget is built.
Derives the gross margin per unit and an average capital-recovery ratio that links the price, the average cost tied up per unit, and the margin — this ratio is what later scales a target profit figure up into a target sales value.
The analyst picks one of three efficiency degrees (see §04). Each maps to a fixed multiplier applied to the asset share — the stricter the degree, the smaller the multiplier, and the higher the net profit the assets are required to generate.
Works backward from the target net profit to a target gross profit, then uses the capital-recovery ratio to size the Sales Value and Purchases Value needed to produce it — this is the first statement the tool prints.
Repeats the same back-solving using the interest share instead of the asset share, producing the extra sales needed purely to cover financing cost at zero added net profit. The two sales figures are added into the final required annual sales figure.
All fields are required and refer to a single product, on an annual basis where noted.
| Degree | Reading | Multiplier |
|---|---|---|
| Good | Baseline — the starting point of safety | × 4.5 |
| Very good | A tighter, more demanding safety margin | × 3.5 |
| High very good | The strictest scenario the tool offers | × 2.5 |
The tool also validates that f1 > f2, f6 > f1 and f6 > f2 before it will calculate anything.
A product priced at 120 per unit, costing 80 to make, carrying 15,000 of annual overhead and 5,000 of annual interest, against an asset share of 150,000 — evaluated at the Good degree of safety (× 4.5).
| Sales value | 101,250.00 |
| Minus purchases value | 67,500.00 |
| Gross profit | 33,750.00 |
| Minus expenses | 15,000.00 |
| Net profit | 18,750.00 |
| Excess sales value | 15,000.00 |
| Minus purchases value | 10,000.00 |
| Gross profit | 5,000.00 |
| Minus debit interest | 5,000.00 |
| Net profit | 0.00 |
| Sales value of the operating budget | 101,250.00 |
| Excess sales value to cover interest | 15,000.00 |
| Total annual sales required | 116,250.00 |
The evaluation report below — description, mechanism, required data, results, and the worked example — is also available as a ready-made PDF file, generated in advance rather than exported from the browser.