Build Leveraged Buyout Model Advanced

Overview This exercise guides you through building an Advanced Leveraged Buyout (LBO) model. A Leveraged Buyout model is a valuation methodology that measures the Internal Rate of Return (IRR) from acquiring a company using a combination of Investor Equity and significant Debt. This exercise emphasizes understanding how financial projections, debt schedules, and levered cash flows interact to produce equity returns. Learning Goals Master LBO structure: Complete assumptions, sources & uses, and capital structure to understand the deal mechanics (Sources & Uses). Project company performance: Forecast financial statements (Income Statement, Balance Sheet, Cash Flow Statement) and calculate Levered Cash Flow to evaluate the company’s ability to service debt and generate equity returns. Analyze returns: Compute exit value, equity value, and IRR while understanding sensitivity to changes in key assumptions (Sensitivity Analysis). Key Concepts EBITDA: Core profitability metric used to assess company performance and debt capacity. Debt Schedule: Tracks principal, interest, and repayments over the investment period. Levered Cash Flow: Cash available to equity holders after servicing debt. Internal Rate of Return (IRR): Measures annualized return to equity investors. MOIC (Multiple on Invested Capital): Total cash returned to investors relative to their initial investment. Exit Valuation: Calculates the expected sale value of the company using EBITDA multiples at the end of the holding period.

Practice Build Leveraged Buyout Model Advanced with interactive Excel modeling exercises in our LBO Modeling module.

This hands-on modeling exercise helps you master Build Leveraged Buyout Model Advanced through real-world Excel practice and financial modeling techniques.