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Houlihan Lokey Restructuring Case Study

Project Glenmoor — 13-Week Cash Flow & Financeability

A 1.5-hour Liquidity Forecast / Financeability Review case study with a complete model answer

90
Minute Format
2
Deliverables
6
Concepts Tested
Intermediate
Difficulty

Modeled After

Houlihan Lokey

A financing-viability review in which the liquidity forecast replaces valuation entirely: a twelve-week cash flow run twice — with and without transaction-conditioned funding — to pinpoint the cash-out date, alongside an investor commitment tracker listing each commitment, its confirmed timing and its planned signing date

Structure and exhibit set are modeled after Houlihan Lokey. The company, the financials and every figure in this case are entirely our own.

The Situation

Glenmoor Launch Systems, Inc. builds and flies the Halcyon-1, a two-stage small-launch vehicle carrying dedicated and rideshare payloads to low Earth orbit from the Palmerdown Test Range in New Mexico.

Glenmoor Launch Systems, Inc.

Sector
Small-launch aerospace — a two-stage vehicle flying dedicated and rideshare payloads to low Earth orbit, with three flights to date and two successes
Size
Geography
United States; headquartered in Vandermere, California, flying from the Palmerdown Test Range in New Mexico
Ownership
Situation

The Prompt

You are the financial advisor to Glenmoor Launch Systems, Inc. The company has a founder-led rescue financing on the table and a venture loan whose minimum unrestricted cash covenant is tested every Friday.

90 minutesRestructuring & Special SituationsModeling

Supporting Materials

What you are handed at the start of the case, in the format a real process would use.

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  • Company Overview and Operating Report

  • Summary of the Venture Loan and the Launch Services Agreement

  • The Rescue Financing as Proposed

  • Bank and treasury extract

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What You Have to Produce

The deliverables, in the order the committee will read them. The exercise runs 90 minutes.

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  1. PART 1

    The opening position, and what the company can actually spend

  2. PART 2

    Budget versus actual, the four weeks behind you

  3. PART 3

    Build the weekly cash flow

  4. PART 4

    Restricted cash and the covenant test

  5. PART 5

    Run it twice

  6. PART 6

    The cash-out date

  7. PART 7

    Screen the investor commitment tracker

  8. PART 8

    Financeability, and what management must do

Attempt It First

Blank modelling template

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The answer model with every produced cell cleared — the shell you build your attempt in. Work it in Excel against the clock, then check yourself against the model answer below.

How to Approach It

The order a strong candidate works in, and why. This is the shape of the answer — the finished Excel model and memo are in the solution set below.

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  1. 01

    Find out what the cash balance actually is

  2. 02

    Read the covenant, both halves of it

  3. 03

    Put the calendar in before the numbers

  4. 04

    Use the last four weeks to set the run rate

  5. 05

    Run it twice, and prove the runs are comparable

  6. 06

    Screen the tracker on timing, not on optimism

  7. 07

    Report three dates and pick one

  8. 08

    Finish with dates, not adjectives

Key Concepts

The ideas this case is built on. Know these cold and the case becomes a question of execution rather than knowledge.

The thirteen-week cash flow

A weekly forecast of receipts and disbursements over one quarter, built from contracts and payment calendars rather than from accruals. It is the standard instrument of a liquidity crisis because it is the only horizon over which a company's actual cash movements can be forecast with any precision, and because a covenant tested weekly or a payroll run biweekly cannot be seen at all in a monthly model. It forecasts cash, not earnings: there is no accrual, no working capital roll and no depreciation in it anywhere.

Restricted cash and available liquidity

Cash a company reports is not necessarily cash it can spend. Amounts in blocked accounts, cash collateral posted against letters of credit, customer deposits held under contract and segregated contingency accounts all sit on the balance sheet and none of them is available. Every covenant, every runway calculation and every board discussion should be struck on available liquidity, and the gap between the two lines widens whenever a contract requires the restricted balance to be topped up.

The minimum liquidity covenant

A balance test rather than a ratio test: unrestricted cash may not fall below a stated amount. Venture and growth lenders use it because a pre-profitability borrower has no earnings to strike a leverage or coverage ratio on. Two things about it decide when it fails — what it is measured on and how often it is tested — and a weekly test with no cure right converts a slow decline into a dated event of default.

The cash-out date

The date on which the company can no longer meet its obligations, which is almost never the date its cash balance reaches zero. A minimum liquidity covenant bites above zero, a restricted balance is unavailable at any balance, and an event of default accelerates everything behind it. Reporting the week the cash line crosses zero, when a covenant fails weeks earlier, is the most common single error in this archetype.

Transaction-conditioned funding

Money committed subject to a condition that has not yet been satisfied — a round closing at a minimum size, a contract amendment being executed, diligence completing. It is not the same instrument as money in the bank, and a forecast that treats it as certain has assumed away the question it was built to answer. The convention is to run the forecast twice, with and without, so the difference between the two is a measurement of what the conditioned money is worth in weeks.

The investor commitment tracker

A row per commitment: the party, the amount, the instrument, what it is conditioned on, whether the timing is confirmed and when a commitment letter would actually be signed. Its purpose is to expose the dependencies between commitments — a round minimum that only clears if a particular party signs, or a condition on one commitment that is another commitment's precondition — which is invisible in a total and obvious once the conditions are read across the rows.

Budget versus actual: timing variance and rate variance

A receipt that arrives two weeks late produces a large variance that reverses to nothing; a cost line that runs over in every week produces a small variance that compounds. They are different in kind and netting them into one number destroys the only half that forecasts anything. The discipline is to split the variance before carrying any of it forward, and to say in the model which half was carried.

Financeability

Whether a business can be funded, as distinct from what it is worth. The answer is rarely yes or no: it is usually 'yes, if', and the value of the analysis is in the 'if'. A financeability review that concludes with a number has answered a valuation question nobody asked; one that concludes with three conditions and the date each has to be met by has done the work.

What Makes It Hard

The specific traps in this case — the places candidates lose the assessment without noticing.

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Check Your Answer

Type the figures you produced and find out how many are right before you open the worked answer. You get a verdict and, where you are off, a pointer to the part of the build to re-check — never the number itself. Everything you type stays on this device.

How to type a figure. Digits, with an optional unit: 1,234.5, $1,234.5, 2.6x, 21.4%. For a negative use (20.0) or -20.0. Enter as many decimals as you carried — precision is never penalised.

Your Figures

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

  • $ in millions · graded within ±2%

What the Case Asked For

The arithmetic is only half of it. Tick off what you actually produced — this half is yours to score, because nothing can grade a written recommendation from a checkbox.

The Model Answer

The worked answer in full: Excel model and memo, built the way a banker would actually build them. It is a reference, not a submission — a strong answer under the clock is far shorter.

What the Solution Covers

  • 13-week cash flow construction
  • Cash-out date identification
  • Investor commitment tracker
  • Contingency account and restricted cash
  • Budget versus actual variance
  • Financeability assessment

Memo

The written recommendation and how it was reached

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Sign up and upgrade to Diamond to unlock the Excel model, the memo and the audio walkthrough.

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The Excel Model

The model is linked and tied out end to end — every schedule, every formula and every check, in the file itself.

Downloads are available to Diamond members

Excel Model and Memo (PDF) — yours to open, edit and rebuild

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Walkthrough

A conversational walkthrough of how to approach the case under time pressure — where to start, what to cut, and how the recommendation gets defended.

Audio Walkthrough

60s Free Preview
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How to approach Project Glenmoor — 13-Week Cash Flow & Financeability

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Frequently Asked Questions

Why thirteen weeks rather than twelve or twenty-six?

Thirteen weeks is a quarter, which lines up with covenant test dates, quarterly amortization and board reporting, and it is about as far out as a company in distress can forecast weekly receipts with any confidence. Beyond a quarter the receipt side becomes guesswork and the exercise stops being a cash forecast; inside a quarter the payment calendar is known and the forecast is mostly arithmetic on dates.

Should the forecast include money that has been committed but is conditioned?

Run it both ways. The convention in this archetype is two runs off one operating forecast — with the transaction-conditioned money and without — so the difference between them measures what the conditioned money is worth in weeks of runway. Within the funded run, the working rule is that a commitment goes in if its timing is confirmed, because a forecast is a statement about dates and a commitment with no date cannot be placed in a week. That is not a judgment about whether the money will come.

How should restricted cash be presented?

As its own line, immediately under the reported balance, with the available line beneath it in the position of the answer. Every ratio, covenant and runway figure should be struck on the available line, and the presentation should make it impossible to read the reported balance as spendable. Where the restricted amount changes during the period, show the change in the week it happens rather than netting it into a movement somewhere else.

Is a liquidity forecast really a case study, or is it just bookkeeping?

The construction is bookkeeping and the judgments are not. Which of three cash-out dates governs, what comes out of the balance before the covenant is tested, which half of a historical variance forecasts anything, which commitments may be placed in a week, and whether a funding problem is an amount problem or a timing problem — none of those is arithmetic, and all of them change the answer. The arithmetic is the medium, not the exercise.

What does a good financeability conclusion look like?

Conditional, and dated. 'Financeable' and 'not financeable' are both usually wrong; the honest answer is that the business can be funded if a specific set of things happen by specific dates, each derived from the forecast. The value is in the conditions, and a review that names them and dates them is worth more to a board than one that produces a cleaner-looking yes.

How much of the 90 minutes should go on building the weeks?

Less than half. Most of the cells in a thirteen-week model are one formula filled right across thirteen columns, so the build is fast once the calendar and the restricted-cash treatment are right. The time goes into reading the documents, reading the treasury extract, splitting the historical variance and screening the tracker. If you are still filling cells at the hour mark, the reading was too short.

About This Liquidity Forecast / Financeability Review Case Study

Liquidity Forecast / Financeability Review case study for investment banking interviews. 90-minute format covering 13-week cash flow construction, cash-out date identification, investor commitment tracker. Includes the full prompt, a tied-out Excel model, a written memo and an audio walkthrough.

This case study sits in Investment Banking, under Restructuring & Special Situations. Every case ships with the full prompt, the supporting materials, a complete model answer and an audio walkthrough of the judgment behind the recommendation.

90-Minute Format

The time limit a real assessment would give you

Excel Model

Included in the model answer

Memo

Included in the model answer

Audio Walkthrough

How to approach the case under time pressure

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