Unless a company is certain that it can rely entirely on internally generated funds to finance its activities, it will have to estimate what its external funding requirements will be. In the debt management process, there is a repetitive cycle of
● estimating total external funding requirements, and the variation in these requirements over time
● organizing the total external funding requirements into three broad categories: longterm, short-term and contingency funding
● planning how and when to obtain the required funds, e.g. by issuing new equity or by borrowing.