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Advanced LBO Modeling

This course is a more thorough treatment of the standard LBO course covered in the Premium Package, and is designed for investment banking and private equity professionals who want to take their LBO modeling skills to the next level.  Trainees build a full LBO model with stock vs asset sale toggles, multiple tranches of debt, PIK toggles, and sophisticated deferred tax and depreciation schedules.

What You Will Learn

  • Learn how an LBO / Recapitalization works given today’s benchmarks and credit environment
  • Develop an “industrial strength” comprehensive, and integrated LBO model, with multiple operating scenarios
  • Integrate switches – Standalone vs. LBO vs. Recap model
  • Toggle between tax and valuation implications of asset deals, (338(h)(10) election, and stock sale
  • Gain the confidence to ace your private equity interviews
  • Modeling LBO debt: Senior, Revolver, Sub, Mezz, and Pref stock. Model PIK vs. cash interest and dividends, etc.
  • Building the LBO Sources & Uses (S&U) Schedule – the correct way
  • Analyze IRRs for sponsors, management, preferreds, and mezzanine
  • Add complex Depreciation / Tax / NOLs / Deferred Tax / Working Capital / Amortization schedules
  • Use as a reference to get ahead on the job and in your career

Advanced LBO Modeling Highlights

  1. Intuitive, Self-Paced and Comprehensive

    Wall Street Prep’s Advanced LBO Modeling Self Study Program is intuitive and self-paced. You should expect to spend approximately 20-30 hours to complete it. The program uses approximately 350 pages of tutorial guidance and Excel model templates to teaches students how to build, analyze, and interpret LBO models and transactions in a step-by-step fashion, at their own pace.

  2. Real World “On the Job” Investment Banking Training

    The Advanced LBO Modeling Program bridges the gap between academics and the real world to equip students with the practical financial skill set that they will need in private equity and leveraged finance. Students learn LBO modeling in Excel from scratch using intuitive, step-by-step instruction and model templates the way it is actually performed in private equity. The program utilizes a case study format, as students follow their tutorial guide alongside the Excel model templates, and are directed to the appropriate external documents (SEC filings, research reports, etc.) in order to build complex LBO model the way they would on the job.

  3. Support Center

    Upon enrollment, students gain 24-month free access to Wall Street Prep’s Online Support Center, where they receive answers to questions, free downloads, and important updates.

  4. Boost Add-In for Excel

    Free Access to Boost, an all-in-one suite of time-saving tools designed for people who build financial models in Excel. Key features include: Easily assign custom shortcuts to all of Boost’s features; Easily understand long formulas with the powerful ‘Precedents’ and ‘Dependents’ Tool; A fully functioning classic 2003 menu (in ’07 and ’10 Excel); And much more!


  • Accounting: The program assumes a basic introductory knowledge of accounting (e.g. interaction of balance sheet, cash flow, and income statement). Students with no prior background in Accounting should enroll in the Accounting Refresher Supplement in addition to the Self Study Program (option available at check-out).
  • Corporate Finance: Although general exposure to corporate finance is helpful, it is not required.
  • Excel: Basic introductory Excel knowledge is highly recommended. Students with limited or no experience using Excel should enroll in the Excel Crash Course Supplement in addition to the Self Study Program (option available at check-out).

Advanced LBO Modeling Agenda

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Introduction to LBO and recaps

  • How does an LBO or Recap work?
  • Who are the major players?
  • What is the current financing environment?
  • What are the industry benchmarks?

LBO model development

  • Pro forma financial statement projections
    • Line-by-line build-up of the IS / BS and CFS
    • Elegantly model LBO and recap adjustments
    • Model LBOs as asset sales vs. stock sales
    • Integrate asset write-ups and associated deferred taxes
  • Toggle switches
    • Transaction type: Standalone/LBO/Recap
    • Tax type: Asset sale / (338(h) (10) election / Stock Sale
    • Operating sensitivities: Best case / Base case / Weak cas
  • Modeling LBO debt
    • Senior & subordinated notes – discretionary and required payments for multiple tranches
    • Mezzanine finance – PIK vs. cash interest
    • Preferred stock – PIK vs. cash dividends
    • Revolver – Integrated automatic cash sweep, minimum cash balance, and maximum borrowing capacity
  • Building the LBO sources & uses (S&U)
    • Build a heavy duty, yet flexible, sources & uses of funds schedule
    • Make adjustments in one place – watch it flow error-free throughout entire model
  • LBO returns and exit analysis
    • Sensitize IRRs (using XIRR) for:LBO Sponsors
      • Management Rollover
      • Mezzanine Lenders
      • Preferred Shareholders
    • Build complex schedules that can be turned on or off depending on the availability of client dataWorking capital
      • Depreciation
      • Amortization
      • Taxes / NOLs / Deferred taxes
  • LBO modeling best practices
    • Circularity breaker and error trapping – no more DIV#0 and REF#!
    • Scenario analysis
    • Data validation
    • MATCH, OFFSET and INDEX functions for improved analysis