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Lbo modelling exam from wall street latest updates 2023
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Lbo modelling exam from wall street latest updates 2023
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Lbo modelling exam from wall street latest updates 2023net working capital = - answer-receivables + inventory - payables
receivables days = - answer-receivables/sales x 365 inventory
days = - answer-inventory/cogs x 365 payables days = - answer-
payables/cogs x 365
capex is estimated as a - answer-% of sales, unless there is a more reasonable method
depreciation is estimated from a - answer-capex/depreciation multiple sources of funds
- answer-cash, revolver, debt (including revolver), equity uses of funds - answer-equity
acquired, existing debt refinanced, debt issuance fees, advisory fees, minimum cash
Equity value = - answer-acquisition EV - net debt
Acquisition EV = - answer-entry LTM ebitda x entry EV/EBITDA multiple main items to
show in IS - answer-net sales, cogs, EBITDA, depreciation, EBIT, interest expense,
EBT, tax expense, net income (where interest expense links to the debt schedule)
main line items to show in BS (assets) - answer-cash, receivables, inventory, pp&e,
investments, goodwill, intangibles main line items to show in BS (liabilities) - answer-
revolver, debt, payables main line items to show in BS (equity) - answer-NCI, retained
earnings, equity cash flow statement flow down - answer-ebitda - cash interest
expense - tax expense - changes in net working capital - capex = cash flow available
for debt repayment - mandated repayments = cash flow available after mandated
payments + revolver issuance (repayments) - accelerated repayments = cash flow for
the year cash flow from operations includes - answer-ebitda, cash interest expense,
tax expense, changes in net working capital cash flow from investing includes -
answer-capex cash flow from financing includes - answer-mandated debt repayments,
revolver issuance or repayments, accelerated repayments (and any debt issuance but
not the case for most LBOs)
cash available for sweep repayment = - answer-beginning cash - min cash required +
cash flow available for debt repayment - mandated payments of debt revolver
issuance equation - answer-=MIN(previous period's undrawn, MIN(cash available for
sweep repayment,0))*-1
revolver repayment equation - answer-=MIN(SUM(starting balance:issuance),MAX(0,
cash available for repayment))*-1
cash interest equation - answer-=IF(Circ=1, average of the last two ending balances *
interest rate, 0) --> note this depends on mid-year vs. end of year convention undrawn
credit facility = - answer-value of revolver - ending balance
cash available for sweep repayment after revolver = - answer-cash available at the
beginning + revolver issuance - revolver repayment
PIK interest means that - answer-the interest is paid on the beginning balance
amortizing loans are - answer-paid down proportionally over the loan's lifetime
mandated repayment = - answer-= IF(maturity year = current year, (beginning balance
+ PIK interest), MIN(beginning balance + PIK interest, beginning balance x amortization
rate))*-1
accelerated repayment = - answer-=MIN(SUM(beginning balance, PIK interest,
mandatory repayment),MAX(cash available for repayment,0))*-1
Lbo modelling
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