What Are Sources & Uses in Investment Banking?

In investment banking, sources and uses refers to the analysis of the sources of funds and the uses of those funds in a financial transaction or project. This analysis is typically presented in the form of a sources and uses table, which outlines the sources of funds (e.g. debt, equity, assets) and the corresponding uses of those funds (e.g. acquisition, expansion, debt repayment).

The sources and uses analysis is used to ensure that there is sufficient funding available to support the planned transactions or projects, and that the funds are being used in a way that aligns with the overall financial goals and strategy of the company.

For example, in the context of an acquisition, a sources and uses analysis might show the sources of funding for the acquisition (e.g. debt, equity, cash on hand) and how those funds will be used (e.g. to pay the purchase price, cover transaction costs, and fund any necessary capital expenditures).

Overall, the sources and uses analysis is an important tool in investment banking, as it helps to identify and manage the financial resources needed to support a company's growth and development.