This is an adaptation of the intermediate model. In most cases, you'll basically be asked to build a full 3-statement LBO from scratch and incorporate a few scenarios. Think about this as one of the scenarios you may be asked to incorporate.
Remember, really try to figure things out on your own before 'cheating' with the answer sheet. For scenarios, I like to practically think about what the scenario is trying to achieve before just blindly banging away in excel. So, if this is an earnout scenario--really think about what an earnout is, who benefits, and how that might be modeled.
Goal: complete the template in under 45 minutes, model from a blank sheet in under 1 hour. Try to summarize in 3 sentences or less why this would or would not be a good investment purely based on the output of the model.
Steps:
The_Pulse_LBO_Model_Earnout_Prompt.docx
The_Pulse_LBO_Model_Earnout_Scenario.xlsx
The_Pulse_LBO_Model_Earnout_Scenario_Answer.xlsx
πPassword: Buysideπ
Tip: an earnout is an equity mechanism (it is really just a concern when modeling returns)