short cut to LBO model
I found a post saying there is a shortcut to LBO model: 1)make assumptions on the net change in working capital rather than looking at each item on balance sheet 2) need some form of Income statement to track how the debt balance change 3) need some type of cash flow statement to see how much cash is available to repay debt..
My questions are these: 1) why working capital? why is it important in LBO? 2) How you track the debt balance changes on IS? by interest payment? 3) on cash flow statement, if you want to see cash available to repay debt,, don't you have to have full CFS to see cash balance? then it's not a short cut.... what specific line items on cfs are most necessary?
thank you in advance...
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