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LBO MODELING EXAM QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS VERIFIED GUARANTEED PASS

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LBO MODELING EXAM QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS VERIFIED GUARANTEED PASS 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 ...

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  • October 31, 2024
  • 5
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
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LBO MODELING EXAM QUESTIONS AND ANSWERS WITH

COMPLETE SOLUTIONS VERIFIED GUARANTEED PASS


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/depreciation multiple

sources of funds

cash, revolver, debt (including revolver), equity

uses of funds

equity acquired, existing debt refinanced, debt issuance fees, advisory fees, minimum

cash

Equity value =

acquisition EV - net debt

, 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

cash flow from investing includes

capex

cash flow from financing includes

mandated debt repayments, revolver issuance or repayments, accelerated repayments

(and any debt issuance but not the case for most LBOs)

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