Paper LBO Model

This is a Paper LBO practice: You’ll be given a simplified set of assumptions about the deal structure and company performance—things like purchase price, debt/equity mix, revenue growth, EBITDA margin, and exit multiple. Your job is to: 1️⃣ Project revenue, EBITDA, and free cash flow over the holding period. 2️⃣ Estimate debt paydown each year using cash flow. 3️⃣ Calculate the equity value at exit. 4️⃣ Compute the investor’s IRR based on entry and exit equity. The goal isn’t to build a full Excel model—it’s to show that you understand the mechanics of an LBO: how leverage amplifies returns, how debt paydown impacts equity, and what drives IRR. 💡 Tip for interviews: Keep your math clean and round numbers when possible. Interviewers want to see your logic and speed, not exact decimals. Try complete this within 30 mins.

Practice Paper LBO Model with interactive Excel modeling exercises in our LBO Modeling module.

This hands-on modeling exercise helps you master Paper LBO Model through real-world Excel practice and financial modeling techniques.