Preparing Excel Schedules to Determine Compliance with Debt Agreements

Monroe Inc. $($the Company$)$ obtained financing from Pro Bank in Year $8.$ Associated with the debt agreement are debt covenants, which place restrictions on the Company's activities. The intention of the covenants

From the debt agreement between Monroe Inc. and Pro Bank, the financial covenants are included below. Key definitions of certain terms are also included.

Financial Covenants

Total Leverage Ratio. The Company will not, as of the last day of any fiscal quarter, permit the Total Leverage Ratio to be greater than $2\mathrm{.}00$ to $1\mathrm{.}00.$

Minimum EBITDA. The Company will not, as of the last day of any fiscal quarter, permit EBITDA, for the period of the quarter ending on or immediately prior to such date to be less than $$300$ million.

Funded Debt. The Company will not, at any time, permit the aggregate outstanding principal amount of all Funded Debt to exceed an amount equal to $10\%$ of the Company's total assets $($as determined as of

the last day of the most recently ended fiscal quarter for which financial statements have been provided$),$

Definitions

$-$Total Leverage Ratio: As of any date of determination, the ratio of $($a$)$ Funded Debt on such date to $($b$)$ EBITDA for the quarter ending on or immediately prior to such date.

$-$EBITDA: For any period, the sum of the following, for the Company in accordance with GAAP: Net income for such period plus $($b$)$ the sum of the following, to the extent deducted in determining net income for

such period: $(1)$ income tax expense during such period, $(2)$ interest expense, net of interest income for such period, and $(3)$ amortization and depreciation expense.

Funded Debt: As of the date of determination with respect to the Company, the sum of all liabilities of the Company due to borrowing money.

The Excel file associated with this exercise includes quarterly financial information for Monroe Inc. from Quarter $1$ of Year $10$ to Quarter $2$ of Year $12.$

Required

Download the following Excel file: Monroe Inc.

Determine the key financial categories needed to determine whether the company is in compliance with the three financial covenants for each quarter presented.