Rosenbaum and Pearl quote different calculations for equity value at entry and exit on an lbo. In case of an entry, the common calculation is used - i.e. Equity Value = EV - Total Debt - ... + Cash
However, in case of the exit, they quote it as Equity Value = EV - Total Debt - ... - Cash
Can someone please elaborate on the discrepanxcy?
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Did you just list two identical formulas?
Yes, my apologies. I edited it.
Interesting. I'm guessing either the cash is assumed to be dividended out separately, or they're referring to a minimum cash balance for operations that needs to be left in the business.
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