Paper LBO Assumptions
I've been working through paper LBO examples as interview prep.
I'm comfortable with the mechanics and the mental maths is generally ok, but some of the recent examples I've been doing have assumptions that are quite difficult to work with. Things like a 23% EBITDA margin, 12% cost of debt, 37% tax rate.
I can sit there and force myself through the maths but it takes a while and I have to round a lot.
Are these kind of assumptions realistic for a paper LBO in an interview, without a calculator? Or are the assumptions more likely to be 5% revenue CAGR, 25% EBITDA margin, 10% cost of debt etc.? I obviously don't want to be underprepared but I'm stressing out and feel like I'm wasting a lot of time on this.
No. I’ve gone through 3x interview cycles (I’m 5 years into the industry, post MBA) and yet to receive a paper lbo with odd numbers. The guides just complicate things. Generally interviews are only looking to see if you get the concept
Perfect, thanks. Figured this would be the case but didn't want to go into an interview and get completely overwhelmed by the maths.
Could I PM you for a quick question on this?
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