Ev if repay existing debt, eqv if assume existing debt
FCF
Cash from operations - capex and recurring items cash flow from investing or financing
Rev growth projection
Decline over time ex 10-5
BS items projection
% of rev, cogs, or opexx use historical %
Capex projection
, % of rev, hist avg, fixed dollar growth
Why fcf matters lbo
How much cash left to pay of debt
How to pay off debt with fcf
Required, min cash levels, optional
2x 5yrs irr
15%
2x 3yrs irr
26%
3x 5yrs irr
25%
PIK Interest acceues to
Principle
3x 3yrs irr
44%
Ebit / ebitda margin projection
Stay same
Items with greatest IRR impact
Purchase price, % debt/equity, exit price
Coverage Ratio
EBITDA / Interest Expense
High yield debt has ____ interest type generally
Fixed
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