LBO Modeling Test Questions and 100% Correct Answers
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Module
LBO Modeling
Institution
LBO Modeling
Net working capital = receivables + inventory - payables
Receivables days = receivables/sales x 365
Inventory days = inventory/cogs x 365
Payables days = payables/cogs x 365
Capex is estimated as a % of sales, unless there is a more reasonable method
Depreciation is estimated from a capex/depr...
Acquisition ev = ✅entry ltm ebitda x entry ev/ebitda multiple
Main items to show in is ✅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) ✅cash, receivables, inventory, pp&e,
investments, goodwill, intangibles
Main line items to show in bs (liabilities) ✅revolver, debt, payables
Main line items to show in bs (equity) ✅nci, retained earnings, equity
Cash flow statement flow down ✅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 ✅ebitda, cash interest expense, tax expense,
changes in net working capital
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