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Wall Street Prep

The Impact of Tax Reform on Financial Models

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The Impact of Tax Reform on Financial Models

  •   36 Lessons
  •   2h 46m
  •   79,681 Students

Understand the impact of TCJA (2017 Tax Reform) on DCF, LBO, M&A and Financial Statement models that investment bankers and private equity professionals use to analyze transactions

Understand How to Modify Pitchbook and Deal Models to Reflect Tax Reform

TCJA impacts far more than the headline tax rate reduction. This course shows investment bankers and private equity professionals how the financial models they use to support M&A and LBO transactions need to be revised to reflect new limits on interest expense deductions, bonus depreciation and changes to NOL rules.

Excel Model Template Included: Includes a complete and reusable TCJA-Adjusted Financial Statement Model, DCF and LBO Model Template.

This course is used to train new hires at:

What You Will Learn

Part 1: Financial Statement Model Impacts

  • Overview of the Changes in TCJA
  • Modeling Bonus Depreciation
  • Modeling Interest Carryforward Limits
  • Modeling EBIT and EBITDA Tests
  • Modeling NOL Limits

Part 2: Valuation Model Impact

  • Overview of Tax Reform Impact on Valuation
  • Adjusting Free Cash Flows, WACC and Terminal Value Calculations for TCJA
  • How to Deal with NOLs and Carryforwards

Part 3: M&A and Private Equity

  • Impact on LBO Models
  • Impact on M&A Deal Structures

Course Samples

watch video
Tax Reform Headlines
watch video
Headline 1: Lower Tax Rate
watch video
Headline 3: Limit on Interest Deduction

Course Extras

Taught by Bankers

Our instructors are former investment bankers who give lessons real-world context by connecting it to their experience on the desk.

Used on the Street

This is the same comprehensive course our corporate clients use to prepare their analysts and associates.

Free Unlimited Access to the WSP Support Center

Receive answers to questions, free downloads, and more from our staff of experienced investment bankers.


This course assumes basic familiarity with financial modeling, LBO and DCF analysis. Students with no prior background in financial modeling should enroll in the Premium Package prior to taking this course.

Learn More

Course TOC

Tax Reform Overview
1. TCJA Introduction 1:14
2. Course Downloads Files
3. Tax Reform Headlines 4:22
Impact on Financial Statement Models
4. Headline 1: Lower Tax Rate 3:12
5. Headline 2: Bonus Depreciation 6:26
6. Bonus Depreciation: Model Impact 12:56
7. Headline 3: Limit on Interest Deduction, Part 1 4:02
8. Calculating EBITDA and EBIT 1:41
9. Limit on Interest Deduction: Model Impact 5:51
10. Interest Carryforward 3:55
11. Connecting the Carryover Schedule to the Model 4:35
12. Headline 3: Limit on Interest Deduction, Part 2 1:20
13. Headline 4: NOL Limits 1:58
14. NOL Limits: Model Impact 8:40
15. Putting it Together: Tax Savings vs Pre-TCJA 6:26
Impact on Valuation Models
16. Tax Reform's Impact on Valuation 4:11
17. Tax Reform's Impact on the Stage 1 DCF 3:50
18. Tax Reform's Impact on WACC 1:32
19. Tax Reform's Impact on Terminal Value 3:53
20. Normalizing Terminal Year Cash Flows 3:59
21. Exit Multiple Requires No Change 0:24
22. Dealing with NOLs and Carryforwards 2:00
23. How to deal with NOLs 5:08
24. How to Deal with Carryforwards 13:14
25. Putting it Together: NOLs and Carryforwards 1:43
26. Summary: Tax Reform's Impact on the DCF Model 2:08
Impact on LBO and M&A Models and Deal Structure
27. Tax Reform's Impact on the LBO 5:33
28. Tax Reform's Impact on the LBO: Getting into the Model 8:55
29. Tax Reform's Impact on Deal Structuring 10:50
30. Tax Reform's Impact on M&A 16:55
31. Putting it Together: Tax Reform's Impact on M&A 3:18
Appendix: Q&A
32. Q&A: TCJA Impact on Valuation 6:46
33. Q&A: Handling the Remainder of Bonus Depreciation 0:38
34. Q&A: EBITDA/EBIT Toggle 0:44
35. Q&A: What Happens to Carryover if Tax Expires? 1:04
36. Q&A: Tax Reform's Impact on Merger Modeling 1:56

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The Wall Street Prep Quicklesson Series

7 Free Financial Modeling Lessons

Get instant access to video lessons taught by experienced investment bankers. Learn financial statement modeling, DCF, M&A, LBO, Comps and Excel shortcuts.