Purchase Price Accounting - PF Balance Sheet Help

Hi all, quick question if someone could guide me in the right direction.

Doing a 3 statement model + LBO, and at the stage of making pre and post transaction balance sheet for the transaction year.

I understand most of the entries, however, a bit confused what to do with the cash.

The company has a pre-existing cash balance, say $100M. This is a cash-free, debt-free transaction, so surely this initial cash balance must be wiped to 0. 

My question is, what / where is the corresponding debit entry to make the balance sheet balance? Right now I just tuck it under Shareholders Equity and it is balancing, not sure if that's the correct thing to do

_______________________________________________________________________

Edited: While on the topic, could someone give a clear distinction, in terms of practical modeling outcome, between a cash free/ debt free transaction vs. assuming existing debt / cash? 

Is the difference just in that, for the former, you pay an implied EV, which is used to take out the net debt? And in the latter, you only pay an implied equity, and you assume the existing debt and cash?

Thanks

1 Comments
 

Fuga aperiam perferendis facere iste. Praesentium et deserunt illum nam atque eligendi. Voluptatem culpa vel dolorum omnis voluptatum velit assumenda. Et odio quibusdam non atque officiis optio odit deserunt. Minus aut omnis voluptatem quod soluta qui voluptate veritatis.

At mollitia qui laboriosam eius perferendis voluptas. Delectus perferendis hic in et. Cumque et quisquam recusandae accusantium consectetur libero. Fugiat est modi ut quis omnis. Ut ipsam id ratione culpa. A voluptatem vero asperiores suscipit placeat.

Deserunt voluptas voluptatem quia ullam deserunt non a. Est quae non laboriosam. Veniam soluta facere aspernatur cum sit et fuga.

Sit est perspiciatis incidunt aspernatur. Maiores asperiores molestiae doloribus exercitationem ut. Consectetur consequatur consequatur illum magni in maiores. Nisi ea enim et vero.

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

Career Advancement Opportunities

November 2026 Investment Banking

  • Evercore 01 99.5%
  • Moelis & Company 01 99.0%
  • JPMorgan 01 98.4%
  • Guggenheim Partners 02 97.9%
  • Morgan Stanley 06 97.4%

Overall Employee Satisfaction

November 2026 Investment Banking

  • Moelis & Company No 99.5%
  • Morgan Stanley 02 99.0%
  • Evercore 01 98.4%
  • Banco Santander 02 97.9%
  • BMO Capital Markets 13 97.4%

Professional Growth Opportunities

November 2026 Investment Banking

  • Evercore 01 99.5%
  • Moelis & Company 01 99.0%
  • Morgan Stanley 05 98.4%
  • Goldman Sachs 01 97.9%
  • JPMorgan No 97.4%

Total Avg Compensation

November 2026 Investment Banking

  • Vice President (16) $429
  • Associates (57) $264
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (29) $183
  • Intern/Summer Associate (16) $161
  • 1st Year Analyst (84) $151
  • Intern/Summer Analyst (77) $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
Betsy Massar's picture
Betsy Massar
98.9
6
GameTheory's picture
GameTheory
98.9
7
CompBanker's picture
CompBanker
98.9
8
dosk17's picture
dosk17
98.9
9
DrApeman's picture
DrApeman
98.9
10
Linda Abraham's picture
Linda Abraham
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...”