PUT Calculator

Fill in the fields below to get a snapshot of gross profit comparisons with and without the 100% protection of a PUT.

Dollar Amount of PUT

The "notional" amount or the total amount of the PUT you are considering. This is also the figure we will use as the bankruptcy amount.

Average Receivable Turns per year

The average number of times per year you expect to turn this receivable.

Gross Profit Margin (%)

Your variable gross margin

Tenor of PUT in months

How many months of PUT protection you wish to purchase

PUT Fee in Basis Points

The quoted basis-point rate per month percent=(1 BPS=1/100th of a percent.) Quotes for Basis Points may also be expressed as a percentage. For example, 1% would equal 100 BPS.

Month in which bankrupty occurs

How many months into the PUT, the company files for bankruptcy

Please, provide a values for all fields!

Results — With and Without PUT Protection

Please note: Calculations are based on the PUT period only, not the entire year, to more accurately reflect the cost effectiveness of the PUT.

No Protection / No Put
100% Protection with PUT
Year-to-date sales as of bankruptcy

Annual Sales divided by the number of months sold before bankruptcy

No Protection / No Put

100% Protection with PUT

Amount of bankruptcy

No Protection / No Put

100% Protection with PUT

Amount of PUT protection

The "notional" amount or the total amount of the PUT you are considering. This is also the figure we will use as the bankruptcy amount.

No Protection / No Put

$0

100% Protection with PUT

Gross profit earned before bankruptcy

Sales for the period multiplied by your variable gross margin

No Protection / No Put

100% Protection with PUT

Cost of PUT

Total dollar amount charged for the PUT

No Protection / No Put

$0

100% Protection with PUT

Gross profit (minus fee) after bankruptcy

Gross profits minus the total cost of the PUT

No Protection / No Put

100% Protection with PUT

ROI Calculator

Average Outstanding Accounts Receivable ($)
Average Number of Active Accounts
Estimated Annual Sales ($)
Variable Gross Profit Margin (%)
If part of a Borrowing Base, what is the Current Advance Rate (%)
Amount of Excluded Receivables from Eligible Borrowing Base ($)
Premium Rate in Basis Points
Please, provide a values for all fields!

ROI Calculator

Revise Data

Sales Analysis:

Average number of Receivable Turns per Year
DSO (Days Sales Outstanding)

DSO = The average number of days it takes to collect revenue after a sale is made.         Accounts Receivable
= --------------------------------- x  Number of Days
        Total Credit Sales

Average Account Balance

Safe Sales Expansion Analysis:

Use this to see how much in additional Credit Lines you need to find across your entire portfolio or in new customers to justify the cost of a Risk Mitigation Program.

1. Estimated Tax Deductible Premiums for an Insurance Program
2. Divided by your Variable Gross Margin (%)
3. Incremental Sales needed to pay for Credit Insurance
4. Divided by how many times you turn your Receivables each year
Incremental Credit Lines needed across entire Portfolio to pay for Credit Insurance!!

Borrowing Analysis:

Borrowing Base Efficiencies:

Use this to see the impact of increasing your advance rate, your eligible base,or both, and the immediate impact it will have on your bottom line.

1. Net Receivables currently (A/R – Excluded)
2. Total Advance Dollars Available under current formula (Net A/R x Current Advance Rate)
3. Potential Advance Dollars under New Advance Rate with a Credit Insurance Program in Place (Net A/R x 85% + Excluded A/R x 75% - Estimated Premium)
4. Potential Additional Capital Available with a Credit Insurance Program in Place
5. Once you reinvested the Additional Capital, it could provide additional per-account-turn margin of (Additional Capital x Variable Gross Margin)
6. On an Annual Basis, this would mean Additional Margin of
7. This would mean an ROI on Premium Dollars of (%)

NOTE: By utilizing Credit Insurance, you may be able to get higher advanced rates, injecting additional working capital immediately into your business. This higher rate would also be applied to an increased eligible base by being able to include International Receivables, Concentrated Receivables as well as Aged Receivables. All this means stronger cash flows and will justify the cost of the premium almost immediately.

Losses Analysis:

Impact of Losses:

Use this to discover how much more you have to sell to make up for even minimal losses in your business.

1. Average Total Accounts Receivable Exposure
2. Losses on just two average Exposures per year
3. You would need this much in Additional Sales to make up the Loss