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?
| +67 | PWP acquisition by Piper cancelled | 27 | 1d |
| +59 | Is my MD a grifter? 16 years, 8 firms | 17 | 4h |
| +43 | No return offer - UPDATE. | 12 | 1d |
| +40 | Article: UBS Wall Street Rebuild Is a Study in Management Failure | 7 | 2d |
| +39 | "Corporate & Investment Banking" Analyst - Why? | 34 | 3h |
| +29 | Lack of talent in IB! | 25 | 8h |
| +28 | What Are The Best Boutiques 2026/2027 | 16 | 9h |
| +24 | Wells Fargo Calling Themselves a BB? | 16 | 11h |
| +24 | Moat of modelling in PE/Finance completely vanished; | 3 | 1d |
| +21 | Internal lateral from coverage to M&A (focused on coverage) | 6 | 1d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
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.
Consequuntur aliquam rerum deserunt possimus corporis. Earum rerum perferendis et autem nihil. Vero omnis nihil ea ex sed. Consequuntur eum quo autem culpa.
Voluptatem nesciunt iste et similique tenetur debitis repellat. Nisi dolores nam voluptatem cumque minus earum. Quia eaque nam voluptas consectetur eum. Dolor tempore qui qui.
Dolorem est molestias sed autem. Dolorem vel et molestiae nulla dolores omnis voluptatem. Explicabo maxime rerum esse impedit dolores facilis. Rerum placeat maiores et aliquid.
Ad aspernatur corporis dolore. Nemo quia consequatur et laborum explicabo. Aliquid molestias adipisci ad sint qui dolore quos ut. Quod quos libero aut eos. Inventore ex rerum ipsam voluptate qui sit consequuntur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...