Probably a silly question, but what is the functionality of a stub period in an lbo model? I understand what it is, but not how it should (should it) actually link with the rest of the model...?
Trending Content - Investment Banking Forum
| +130 | New Article: Dramatic Slide as UBS #22 (US) & New Leadership Desperately Needed | 25 | 5h |
| +102 | Americas M&A League Table Q2 Updated | 49 | 6m |
| +73 | Wealthy Parents / Jaded | 24 | 1d |
| +58 | How are hours rn for SA (interns) | 31 | 20h |
| +54 | A COMPLETE GUIDE TO SUMMER INTERNSHIP RECRUITING | 11 | 19h |
| +49 | Venezuela Debt Restructuring - LAZ vs CVP | 22 | 1d |
| +42 | Boutique firm wants access to my LinkedIn? | 34 | 17h |
| +33 | Investment Banking in Mexico | 9 | 21h |
| +28 | MM bottom bucket bonus | 9 | 4d |
| +26 | Investment Banking is Hard | 11 | 15m |
Career Resources
what i would do is make a little switch to turn on and off the stub period. have your full year items, and then turn on and off the stub.
you just multiply the full year figures by your stub period, and as long as you are consistent throughout (many times forget to multiply things like depreciation by the stub period) it will balance.
Got it. What i'm wondering is why this is important to the rest of the model. Is it just the fact that the bs at the end of the stub period is the bs u need to adjust to get to your pro forma?
that's right.
the time frame has to be consistent. you can't use a FY bs for the pro forma if you made the acquisition in june.
like you said, need to adjust the model because you'll need it for the pro forma bs.
Non amet debitis sed et exercitationem deserunt. Et velit voluptatem non et laboriosam. Voluptate in nesciunt velit aperiam aperiam voluptates reprehenderit. Magni nam dolorum dolor reiciendis. Aut temporibus ut impedit dicta.
Minima deserunt illo consequatur impedit minima provident. Dolorum eos saepe laudantium inventore voluptatibus et omnis dolor. Inventore sed quaerat porro et unde corporis. Aperiam sit ullam quam voluptas nam.
Ipsum placeat placeat quia. Velit et quia cupiditate sed. Voluptatem autem maiores consequatur sit.
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...