• 09/25/2020
    LBO Financial Modeling Test Instructions | Entry Level Position

    Securing a job in private equity requires an understanding of LBO models. This case study has instructions for entry-level positions and more advanced positions, but in this post we will focus on the instructions for an entry-level hire. 

     

     

    Per the video, candidates looking to test their LBO modeling skill set should build an annual LBO model with a 5-year projection that contains the following:

    1. A 50% cash flow sweep that pays down outstanding debt in order of priority.
    2. Debt covenant analysis. Be sure to reference the term sheets for covenants.
    3. A standard 80 / 20 distribution waterfall for equity proceeds.
    4. And finally, an exit analysis worksheet that shows returns both gross and net of fees.

    To download the files mentioned in the video please visit this page: LINK.

     

    LBO Financial Modeling Test