▸case-01 I'm evaluating a buyout of a software firm generating $25M in EBITDA and need a full financial model. Can you structure an LBO framework that includes a sources and uses table, senior and subordinated debt amortization schedules, five-year financial projections, and calculated sponsor metrics like IRR and MOIC? Please also include sensitivity grids comparing different exit valuations and debt levels. | fail→pass | 33,678 | 37,487 | +11% | 1 | 1 | 0% | 8,264 | 8,674 | +5% | 0 | 0 | — |
▸case-02 In an LBO model for Apex Industrial, the forecasted EBITDA is $15M, but annual debt service (interest + principal) comes out to $18M, resulting in persistent negative cash flows after debt service. The team is considering taking on additional revolving credit to bridge the gap permanently. How should this model error be resolved in accordance with private equity debt structuring standards? | pass→pass | 17,530 | 16,485 | -6% | 1 | 1 | 0% | 2,475 | 2,671 | +8% | 0 | 0 | — |
▸case-03 When running the sponsor returns tab in Excel for a $50M equity check buyout of Nova Logistics, the IRR formula returns a #NUM! error. An analyst suggests changing the Excel discount rate guess parameter to 100%. What is the root financial cause of this error and the proper structural fix? | fail→fail | 17,911 | 17,267 | -4% | 1 | 1 | 0% | 3,075 | 3,512 | +14% | 0 | 0 | — |
▸case-04 While modeling a cash sweep mechanism tied to end-of-year cash balances and debt interest payments, Excel triggers a circular reference warning. The junior analyst suggests deleting the cash sweep formula entirely to eliminate the loop. What is the standard technical fix for this spreadsheet loop? | pass→pass | 12,390 | 10,945 | -12% | 1 | 1 | 0% | 2,008 | 2,332 | +16% | 0 | 0 | — |
▸case-05 A sponsor is considering an 8x entry EV/EBITDA buyout for a mid-market industrial manufacturing business with $100M in EBITDA. The deal team wants to default to 100% equity funding to simplify the initial screen before bringing in lenders. What is the conventional LBO transaction capital structure and return sensitivity setup for this scenario? | pass→pass | 28,427 | 25,301 | -11% | 1 | 1 | 0% | 4,061 | 5,606 | +38% | 0 | 0 | — |
▸case-06 A private equity platform company is acquiring a smaller competitor as a bolt-on acquisition for $40M. The deal lead assumes synergies take effect instantly at 100% on day 1 with zero integration costs. How should a bolt-on LBO model properly reflect synergy timing and deal impact? | fail→fail | 18,815 | 21,203 | +13% | 1 | 1 | 0% | 2,671 | 3,508 | +31% | 0 | 0 | — |
▸case-07 For a target company acquired at an Enterprise Value of $500M with $200M senior debt and $50M mezzanine debt, transaction fees are $10M and minimum cash required on balance sheet is $15M. An analyst calculates sponsor equity simply as EV minus total debt ($250M). What is the correct sponsor equity check calculation for the Sources & Uses table? | pass→pass | 8,066 | 6,633 | -18% | 1 | 1 | 0% | 1,659 | 1,642 | -1% | 0 | 0 | — |
▸case-08 In a 5-year LBO model, an analyst calculates mandatory debt principal paydown directly from Net Income before subtracting capital expenditures or working capital changes. How should Cash Flow Available for Debt Service (CFADS) be derived for senior debt amortization? | pass→pass | 12,791 | 12,992 | +2% | 1 | 1 | 0% | 2,239 | 2,634 | +18% | 0 | 0 | — |
▸case-09 A private equity partner notes that extending a holding period from 3 years to 7 years increases the fund's Cash-on-Cash multiple (MOIC) from 2.0x to 2.8x, but decreases the internal rate of return (IRR). The junior analyst thinks there must be a spreadsheet formula error because MOIC increased. How should this return profile behavior be interpreted? | pass→pass | 14,045 | 11,599 | -17% | 1 | 1 | 0% | 2,494 | 2,515 | +1% | 0 | 0 | — |
▸case-10 A sponsor is structuring debt for a $200M enterprise value target. The lender offers Senior Bank Debt at L+350 with mandatory 10% annual amortization and Subordinated Mezzanine Debt at 11% with full PIK (payment-in-kind) interest and bullet maturity at year 5. An analyst proposes applying mandatory annual principal amortization to the Mezzanine debt before Senior Debt. How should debt service priority be structured? | pass→pass | 14,387 | 18,464 | +28% | 1 | 1 | 0% | 2,393 | 3,152 | +32% | 0 | 0 | — |
▸case-11 A private equity deal committee requests a risk analysis for an LBO candidate. An associate creates a 1D table changing only the exit EBITDA multiple. What key financial variable combination should be modeled in a standard 2D LBO sensitivity matrix? | pass→fail | 9,449 | 7,190 | -24% | 1 | 1 | 0% | 1,684 | 1,613 | -4% | 0 | 0 | — |
▸case-12 During an LBO transaction closing, the target company's Net Working Capital (NWC) at close is $5M below the agreed-upon target NWC of $12M. The seller argues this should have no impact on the Sources and Uses table. How does an NWC deficit affect the transaction structure? | pass→pass | 13,853 | 20,228 | +46% | 1 | 1 | 0% | 2,279 | 2,881 | +26% | 0 | 0 | — |
▸case-13 In year 2 of a projection model, seasonal working capital needs drop operating cash balance below the required $5M minimum cash requirement. The analyst lets the cash balance drop to $1M without adjusting debt schedules. What debt schedule component must automatically kick in to prevent cash from falling below the minimum threshold? | pass→pass | 7,088 | 6,533 | -8% | 1 | 1 | 0% | 966 | 1,313 | +36% | 0 | 0 | — |
▸case-14 A $30M subordinated debt tranche carries 12% total interest, split as 8% cash interest and 4% Payment-In-Kind (PIK). In year 1, an associate treats all 12% as a cash outflow on the cash flow statement. What is the correct accounting treatment for the 4% PIK portion? | pass→pass | 10,630 | 12,745 | +20% | 1 | 1 | 0% | 1,713 | 2,354 | +37% | 0 | 0 | — |
▸case-15 In an LBO of a founder-led business, the founder rolls over $20M of existing equity alongside $80M from the private equity sponsor, and a 10% management equity option pool is created at exit. An analyst calculates sponsor IRR using the total gross equity exit value without subtracting management option proceeds or founder rollover share. How should management equity rollover and option pool dilution be handled in sponsor return calculations? | pass→pass | 18,391 | 21,919 | +19% | 1 | 1 | 0% | 2,902 | 3,743 | +29% | 0 | 0 | — |
▸case-16 In year 5 of an LBO model, target EBITDA reaches $40M. The exit assumption is a 9.0x EV/EBITDA multiple. The company has $60M of remaining total debt and $10M of balance sheet cash at exit. An associate claims the exit equity value is $360M. What is the actual exit equity value distributed to shareholders? | pass→pass | 6,021 | 6,603 | +10% | 1 | 1 | 0% | 1,163 | 1,526 | +31% | 0 | 0 | — |
▸case-17 When forecasting unlevered vs levered cash flows for an LBO model, an associate ignores interest expense on the income statement when calculating income taxes, resulting in higher tax payments. Why must interest expense be deducted before calculating tax expense in an LBO model? | pass→pass | 10,500 | 12,639 | +20% | 1 | 1 | 0% | 1,805 | 2,673 | +48% | 0 | 0 | — |
▸case-18 In year 3 of an investment, the sponsor decides to execute a $50M Dividend Recapitalization by issuing new senior debt rather than waiting for an exit. How should the dividend recap affect cash flows and sponsor IRR calculations prior to exit? | pass→pass | 14,256 | 17,410 | +22% | 1 | 1 | 0% | 2,293 | 3,063 | +34% | 0 | 0 | — |
▸case-19 After mandatory debt amortization of $5M on Senior Debt, the target generates $15M of excess cash flow in year 1. An analyst leaves $15M in cash on the balance sheet while 7% interest-bearing debt remains outstanding. How should an LBO cash sweep mechanism behave? | pass→pass | 15,483 | 14,144 | -9% | 1 | 1 | 0% | 2,176 | 2,364 | +9% | 0 | 0 | — |
▸case-20 I am conducting a peer group valuation for a publicly traded specialty retailer using EV/EBITDA and P/E multiples from five listed competitors. Can you build a trading comps valuation summary table that calculates median multiples, implied share price, and equity value range for the target stock? | pass→pass | 21,666 | 27,250 | +26% | 1 | 1 | 0% | 4,041 | 6,403 | +58% | 0 | 0 | — |
▸case-21 A tech startup is raising a $5M Series A round at a $15M pre-money valuation with a 15% unallocated post-money option pool. Can you build an equity capitalization table showing post-series A ownership percentages, price per share, and share count breakdown across founders, seed investors, and Series A investors? | pass→pass | 15,204 | 34,765 | +129% | 1 | 1 | 0% | 3,537 | 6,515 | +84% | 0 | 0 | — |
▸case-22 I need to value a commercial bank using a multi-stage Dividend Discount Model (DDM) based on projected Return on Equity (ROE), Tier 1 capital requirements, dividend payout ratios, and a 9% cost of equity. Can you structure the dividend discount cash flow schedule to derive the equity intrinsic value per share? | pass→pass | 41,118 | 52,032 | +27% | 1 | 1 | 0% | 6,631 | 8,661 | +31% | 0 | 0 | — |
▸case-23 Our corporate treasury team needs an operational 13-week cash flow forecasting schedule to manage weekly accounts receivable collections, vendor accounts payable disbursements, and payroll runs. Can you build a weekly operational cash flow forecasting model for ongoing treasury operations? | pass→pass | 44,011 | 52,883 | +20% | 1 | 1 | 0% | 7,948 | 8,646 | +9% | 0 | 0 | — |