LBO MODEL FUNDAMENTALS EXAM QUESTIONS AND
ANSWERS WITH COMPLETE SOLUTIONS VERIFIED
GRADED A++
LBO Model
A financial model used to evaluate the acquisition of a company using a significant
amount of borrowed funds.
Sources & Uses section
A section in an LBO model that outlines how the transaction is financed and the
purpose of the capital, including the required Investor Equity.
Goodwill & Other Intangibles
Non-physical assets on the Balance Sheet used to balance the equation after adjusting
for new Debt and Equity in an LBO model.
EBITDA Exit Multiple
A multiple used in LBO models to estimate the exit value of a company based on its
Earnings Before Interest, Taxes, Depreciation, and Amortization.
IRR
Internal Rate of Return, a metric used to evaluate the profitability of an investment.
Comparable Companies
Similar companies used for benchmarking purposes to determine appropriate purchase
and exit multiples in an LBO model.
ANSWERS WITH COMPLETE SOLUTIONS VERIFIED
GRADED A++
LBO Model
A financial model used to evaluate the acquisition of a company using a significant
amount of borrowed funds.
Sources & Uses section
A section in an LBO model that outlines how the transaction is financed and the
purpose of the capital, including the required Investor Equity.
Goodwill & Other Intangibles
Non-physical assets on the Balance Sheet used to balance the equation after adjusting
for new Debt and Equity in an LBO model.
EBITDA Exit Multiple
A multiple used in LBO models to estimate the exit value of a company based on its
Earnings Before Interest, Taxes, Depreciation, and Amortization.
IRR
Internal Rate of Return, a metric used to evaluate the profitability of an investment.
Comparable Companies
Similar companies used for benchmarking purposes to determine appropriate purchase
and exit multiples in an LBO model.
