What is ladder curve?

A ladder curve is a graphical representation used in finance to illustrate the relationship between a company's cash flows and its debt obligations over time. It typically shows how cash flows can be allocated to service debt, highlighting periods when cash flow exceeds or falls short of debt payments. This curve helps businesses and investors assess financial health and liquidity risk, guiding decisions on borrowing and investment. Ultimately, it serves as a tool for financial planning and risk management.