Leveraged Buyout Model

The LBO model is often viewed as extraordinarily complex, but it shouldn’t be. This series will demonstrate that an LBO model is simply a three statement model adjusted to reflect a transaction.

001 Dec 23, 2013 Simple LBO

This video introduces the LBO model. It starts with an integrated financial statement model and adds the components required for LBO analysis.

Get Started » 002 May 17, 2014 Simple LBO: Data Tables

This video demonstrates the process of running multiple scenarios through your model, and using data tables to view a range of possible outcomes simultaneously.

Get Started » 003 Mar 13, 2015 Simple LBO: Cash Sweep (1 of 2)

This is the first of two videos explaining the cash sweep in a simple LBO model. It requires six quick steps so I chose to capture the process in its entirety. The benefit of an unedited tutorial is that it exposes the small habits and tricks that are otherwise not shared. I hope it makes the material more approachable.

Get Started » 004 Mar 22, 2016 Simple LBO: Cash Sweep (2 of 2)

Whereas the first video focused on the mechanics of adding a cash flow sweep, the second video will describe what is taking place in your model. We will also be including notes that explain how this is dealt with at the company level.

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005 Jun 14, 2016 Update to Balance Sheet Adjustments

Recently the FASB announced an update that requires a change to the presentation of debt issuance costs in financial statements. While I would argue that the old presentation is superior to this new requirement for most modeling exercises, it is important to be aware of all GAAP standards as you will encounter them reviewing audited financial statements.

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006 May 21, 2019 LBO: Multiple Worksheets Approach

In this video we make the transition from building the model on one worksheet to organizing information on multiple worksheets. As an introduction to this approach, the video focuses on the advantages realized. Per the commentary in the video, the notes associated with this video focus on debt ratio analysis.

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007 Jul 06, 2016 LBO: Adding Preferred Stock

In this video the process of adding preferred stock to the model is captured in its entirety. Whether it's another debt tranche or class of preferred stock, if you are building your own models this is a common exercise in the life of a financial analyst.

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008 Aug 18, 2016 LBO: Cash Sweep Update

Whereas the first video introducing the cash sweep limited optional repayment of debt to senior debt, this video walks through a template with optional repayment toggles for all debt tranches. Financial model available for download.

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009 May 06, 2017 LBO: Class B Common Stock

In this video we start to explore equity structure in greater detail and add Class B Common Stock to the model. The video also provides an overview of private equity fund structure.

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010 Apr 06, 2017 LBO: Common + Preferred

This video covers the benefits of including preferred stock in the equity structure of a transaction.

Get Started » 011 Jan 09, 2020 Distribution Waterfall Introduction

A standard private equity distribution waterfall is made complicated only by the amount of vocabulary used to describe how it works. The math is otherise simple, as this video demonstrates.

Get Started » 012 Aug 06, 2020 LBO Purchase Price Allocation & Accounting

The purpose of this post is to translate the language surrounding purchase accounting into a financial template with instructions that cover the balance sheet adjustments for most control transactions.

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013 Jun 09, 2020 LBO Case Study: BabyBurgers LLC

This case study was developed with the objective of identifying junior team members for a private equity firm. If you are a novice, consider building a simple five-year projection using the summary financials. If you have a more advanced skill-set, you can work with the operating model to build something far more detailed. Best of luck!

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