Leveraged Buyout Model

Private Equity Analysts & Associates can expect to build leveraged buyout models in excel on a day-to-day basis at middle market and large private equity firms.  Whether you are modeling out how much debt you can take on to acquire a commercial building or to checking the feasibility of acquiring a public company with a significant amount of debt, one will need to understand how to put together a typical LBO model from scratch.

Included in a simple LBO model is the following:

  1. Transaction Assumptions tab that includes Sources & Uses and Transaction Assumptions sections
  2. Integrated Financial Statements tab that includes an integrated Income Statement, Balance Sheet and Cash Flow section with historical and projected forecasts three to five years post-closing
  3. Debt Schedule tab which shows debt prior to acquisition, the adjustments, and projected debt schedule post-closing
  4. Returns Analysis tab that includes an IRR calculation

Once a Private Equity Analyst or Associate puts together the first version of a financial model for an assignment, the other senior investment professionals on the deal team will comment and refine the analysis. You should expect to have over 20+ iterations of the model as the deal process progresses to closing.

To master the LBO modeling skill set, the Street of Walls team suggests you learn to build the Training LBO from scratch.