In this video tutorial, we’ll build a leveraged buyout (LBO) model, given some operating and valuation assumptions, in Excel. The goal of this video is to show you that an LBO model is actually a very simple transaction at its core – and quite similar to the mechanics involved when purchasing a home. If after watching this video you want to take your LBO modeling to the next level, see Wall Street Prep’s advanced LBO modeling course.
Note: To download the Excel template that goes with this video, click here
Building a Simple LBO Model – Video 1 of 3
Building a Simple LBO Model – Video 2 of 3
Building a Simple LBO Model – Video 3 of 3
We hope you found this video tutorial. If these videos made sense, you have a basic foundation for delving deeper into the more complicated mechanics of an LBO Model.
If you are preparing for private equity interviews, below are additional tutorials to show you exactly how private equity firms test your LBO knowledge via interview questions and modeling tests:
- Top 25 Private Equity Interview Questions – Baseline knowledge around the technical aspects you’ll be expected to know in PE interviews.
- Paper LBO Test – Given at earlier rounds, you’ll get a pen and paper (no calculator) and 5-10 minutes
- Basic LBO Modeling Test – You’re given a laptop, simple instructions and ~30 minutes – this serves as a slightly more robust early-round screen than the Paper LBO
- Standard LBO Modeling Test – You’re given a laptop and 1-2 hours. This is the most common LBO Modeling Test given at lower-middle market and middle-market PE firms.
- Advanced LBO Modeling Test – You’re given a Laptop, a 5-15 page packet of financial data, and 3-4 hours. You’re most likely to see this from upper-middle market firms or mega-funds in the later rounds of the interview process.