Short-Form LBO Modeling

Estimated completion: 2 hours

This Short-Form LBO Modeling course builds on the fundamentals of LBO valuation learned in Valuation Fundamentals and Valuation Modeling. A short-form LBO model answers key questions such as:

• What returns should a sponsor expect?
• What capital structure is possible for a deal?
• What is a sponsor’s ability to pay for a given company or asset?

In this course, you will learn how to quickly model answers to those questions using Excel, without the added time of building pro forma financial statements.

Key concepts covered in this course include:

• How LBOs and private equity firms create value
• What makes a good LBO candidate
• Common valuation drivers
  • Buyer’s return requirements
  • Availability of leverage in credit markets
  • Sustainable company cash flows for debt repayment
  • The ability of buyers to achieve operating synergies
• Building flexible sources and uses of funds tables
• Determining debt capacity
• Calculating the exit value
• Calculating the IRR and MOIC
• Sensitivity analysis

Recommended prerequisite courses

• Financial Statement Analysis (FSA)
• Excel Modeling Fundamentals
• Intro to Modeling
• 3 Statement Modeling
• Real Company Modeling
• Valuation Fundamentals
• Valuation Modeling