FINANCIAL RATIOS ANALYSIS
Earnings Ratios
The fund exhibits a healthy margin in terms of its EBIT and EBITDA margin from year 2. This margin is expected to be much higher in the latter half of the fund operation due to higher exits during the period.
Cash Flow Ratios
The VSJ fund focuses on a stringent capital deployment policy and expects its initial cash flow to increase substantially in the latter half of its operation. This is because the VSJ fund is an opportunity-based fund, where fund realizations will accrue until partners and borrowers make successful exits and repayment of capital.
Financial Ratios at Redemption
It is important to note that at its redemption, the VSJ fund will have substantial capital to service the interest and principal obligations. These values also show the exponential return on capital that the fund will have due to its comprehensive capital deployment policy. EBIT, EBITDA, and adjusted EBITDA adequately covered the interest coverage covenant, resulting in substantial positive cash flow for the fund at redemption.