Essential Skills

for business & data professionals

Leveraged Buyouts: How to Estimate Your Returns

An absolutely critical stage in calculating a Leveraged Buyout model is to measure the returns achieved by the investor. In this post we’ll measure the return achieved by a private equity company, PrivEq, in their leveraged buyout of another company, MarkerCo. We’ll calculate several common metrics for evaluating returns, and we’ll also identify the source […]

Essential Key Metrics from a Leveraged Buyout

After creating any sort of financial model, you’ll usually want to create some ratios or other metrics that analyse the figures you’ve produced. This is no different when modelling a leveraged buyout, or LBO. In a leveraged buyout, a company will usually acquire a large amount of debt after being bought by another company. It’s […]

How To Project Cash Flows After a Leveraged Buyout

Cash flows after a leveraged buyout can suffer as a result of taking on debt, the standard practice in the leveraged buyout (LBO) process. For the LBO to work, it’s essential that the acquired company can afford the debt repayments that arise as a result of the transaction. This requires the company to have sufficient […]

How to Build the Debt Schedule for a Leveraged Buyout

In a leveraged buyout using debt, one company purchases another using a significant amount of borrowed money to meet the cost of the acquisition. As a result, it is critically important that the company being acquired can afford to repay this debt in the future. Creating a debt schedule is therefore of vital importance when […]