3-Statement LBO Stub Period Adjustment

How would you adjust a 3-statement LBO (including B/S) for a mid-year transaction? 

Let's assume:

  • Fiscal year: Jan-25 to Dec-25
  • Transaction date: Jun-25
  • Currently the model is an annual model (i.e. FY24 and FY25)

Would you:

  • Roll forward the Dec-24 B/S to Jun-25 by essentially multiplying all cashflows by 50% e.g.:
    • Only account for 50% of Net Income
    • Assume only 50% of investments (e.g. Capex, NWC changes etc.) occur
    • Only 50% of D&A occurs
    • i.e. only 50% of the net cash generated
  • Use the mid-year Jun-25 B/S to transact-off (i.e. for EV - EqV Bridge, S&U)
  • Adjust the mid-year Jun-25 B/S for LBO impacts to get a PF Jun-25 B/S (e.g. debt refinancing, goodwill, equity write-off, capitalised financing fees etc.)
  • Roll forward the PF Jun-25 B/S to Dec-25
  • Resume annual model

How would you adjust the debt schedules? Would you:

  • Assuming transaction mid-year at Jun-25, only 50% of the annual debt amortisation and interest expense would be accounted for?

For returns analysis, that's pretty clear to me. 

Any guidance would be much appreciated! Thanks!

1 Comments
 

Sapiente praesentium perspiciatis eveniet aut. Exercitationem dolor esse et beatae. Quaerat quaerat dolor praesentium quisquam sint blanditiis accusamus. Officiis accusamus facere rem vel eveniet sapiente sit. Cupiditate voluptas dolores magni vel et at. Et aut dolorum neque expedita ab consectetur placeat. Ea sed ad aut rerum fugiat.

Perferendis id veritatis inventore mollitia quibusdam voluptatem. Rerum velit sed voluptates dolorem et sapiente. At deserunt ea ex dolores. Rerum ut qui quidem repellendus. Est fugiat asperiores omnis sequi rerum sint.

Explicabo ducimus fugiat exercitationem et doloribus optio a. Qui temporibus voluptate eius modi est quaerat porro. Earum tempora qui aliquam sit quia ea. Velit eum qui a est. In facilis error qui beatae ullam.

I'm an AI bot trained on the most helpful WSO content across 17+ years.

Career Advancement Opportunities

June 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.9%
  • JPMorgan 01 98.3%
  • Guggenheim Partners 01 97.7%
  • Morgan Stanley 07 97.1%

Overall Employee Satisfaction

June 2026 Investment Banking

  • Moelis & Company No 99.4%
  • Morgan Stanley 02 98.8%
  • Evercore 01 98.3%
  • BMO Capital Markets 12 97.7%
  • Banco Santander 01 97.1%

Professional Growth Opportunities

June 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.9%
  • Morgan Stanley 06 98.3%
  • Goldman Sachs 01 97.7%
  • JPMorgan No 97.1%

Total Avg Compensation

June 2026 Investment Banking

  • Vice President (15) $434
  • Associates (44) $258
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (22) $179
  • Intern/Summer Associate (13) $156
  • 1st Year Analyst (79) $150
  • Intern/Summer Analyst (73) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
kanon's picture
kanon
99.0
4
Secyh62's picture
Secyh62
99.0
5
CompBanker's picture
CompBanker
98.9
6
Betsy Massar's picture
Betsy Massar
98.9
7
DrApeman's picture
DrApeman
98.9
8
dosk17's picture
dosk17
98.9
9
GameTheory's picture
GameTheory
98.9
10
bolo up's picture
bolo up
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”