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Learn/LBO Modeling/Formula sheet

LBO Modeling Formula Sheet

Every formula in the track on one page. Print it and keep it next to you.

Structure

Debt sized in turns
Debt=Leverage×EBITDA\text{Debt} = \text{Leverage} \times \text{EBITDA}
Sponsor equity (the plug)
Equity=Total Uses−Total Debt\text{Equity} = \text{Total Uses} - \text{Total Debt}

Debt schedule

Debt paydown
End Debt=Begin Debt−FCF Swept\text{End Debt} = \text{Begin Debt} - \text{FCF Swept}
Equity value
Equity=EV−Net Debt\text{Equity} = \text{EV} - \text{Net Debt}

Exit & returns

Exit equity
Exit Equity=Exit EBITDA×Exit Multiple−Net Debt\text{Exit Equity} = \text{Exit EBITDA} \times \text{Exit Multiple} - \text{Net Debt}
MOIC
MOIC=Exit EquityEntry Equity\text{MOIC} = \dfrac{\text{Exit Equity}}{\text{Entry Equity}}
IRR (single flow)
IRR=MOIC1/years−1\text{IRR} = \text{MOIC}^{1/\text{years}} - 1