For revolver or short-term borrowings, our focus here is on trying to pay it off, or if we're short of cash, we will issue a revolver or short-term borrowings. In this example, in the middle numbers column, we've got cash available to service debt of 1,150. Can I use that all to start paying off my short-term borrowings? Well, not quite. We've got a few things to do first. The first thing is we have to make mandatory debt repayments and we've got a mandatory debt repayment here of 400. Well, that leaves me with 750 of surplus cash after mandatory debt repayment. One other thing we need to do is that we have to put 50 of that aside as a minimum required cash balance but now that leaves me with 700 and I now can start using that for other things. One of those other things is making a repayment on short-term borrowings. Last year, we had ending short-term borrowings of 200. That means we start this year with the same figure of 200 but now I need to decide how much of that to pay off and we're going to use the minus MIN function to help us out. The MIN requires us to put in at least two values and it'll then choose the minimum of those two. The first minimum that we're gonna put in is the surplus cash, and our surplus cash is 700. The second figure we'll put in is the beginning short-term borrowings, which is 200.

We want to choose the minimum of them so that's going to be 200, which fully pays off the short-term borrowings. Why do we put in those two numbers? Well, the first one, the surplus cash is put in there because we only want to repay if cash is available. The second number, the beginning short-term borrowings of 200, that limits our repayment to the beginning amount. It avoids overpaying. I don't want to pay 250 when I only owe 200. Now, a question I often get is why is it a negative? Why is it a minus MIN? It's just so that it looks like a negative in our calculation. So our beginning short-term borrowings of 200, we then subtract to 200 repayment to get us to our ending short-term borrowings of zero. That zero becomes next period's beginning balance of zero again. Now, the opposite of all this would be what if my surplus cash was negative? Well, that would mean I would have a short-term borrowing requirement, so if my surplus cash or short-term borrowing requirement was negative 50, then the minus MIN would create an issuance of 50. My short-term borrowings would go up from 200 to 250.