Conceptual Fundamentals - LBO Modeling

Name: Conceptual Fundamentals - LBO Modeling
Rating: 4.2 (39 reviews)

Learn to back of the envelope model LBOs in Excel like a private equity investor and interview candidate

Created byKashyap Rajagopal

Last updated 6/2020

English

What you'll learn

Overview of what's going on in an LBO with paper LBO interview question example
Creating Sources and Uses table
Generating Cash Flows (PIK included)
Bonus interview question: merits and demerits of structuring the deal

Course content

1 section • 5 lectures • 1h 0m total length

Introduction: Private Equity Goals3:04
Understand what it is that private equity firms do and why they do it
Drivers of Value in a Private Equity LBO4:15
You should conceptually understand the three drivers of LBO value by the end of this lecture
Interview Question: Sources and Uses14:57
Learn to construct a Sources and Uses table and conceptually understand what happens when the sellers roll over their equity into the newly acquired entity.
Interview Question: Cash Flows Generated23:00
Build the bridge to cash flows, generate a simple debt schedule, and figure out how paid-in-kind (PIK) interest impacts the CFS.
Interview Question: Structuring the Deal14:47
Calculate returns for your private equity sponsor and determine how they flex with exit multiple expansion, more nuanced deal negotiations, and estimated company growth rate.

Requirements

Basic finance fundamentals - parts of an income statement, etc.
A curiosity around not just mechanics but the concepts behind private equity

Description

Street of Walls is a website which provides useful private equity instruction- how to do a paper LBO. This course is meant to be at the intermediate level - assuming you understand basic financials - and goes well with Street of Walls. This course focuses on the nuances and particulars of the LBO rather than rehashing everything you already know; this is simply perfect for interview preparation and making an impression. The walk through of a paper LBO on excel is particularly useful practice for those who are interviewing or even those in the industry who have been doing more thematic research and want a refresher on certain concepts.

Who this course is for:

Bankers and consultants looking to enter private equity
Private equity or other investment professionals looking to brush up their knowledge
College/MBA students interested in joining the private equity profession