Hi all,
How should I approach this reg. impact of dcf and lbo on it?
1.) Build the 3 statement model? Just build it and ignore debt raised through lbo and impact of dcf?
2.) Then separately build the dcf and the lbo based on that, with own new balance sheets etc ?!
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what do you mean ignore the impact of the DCF on the 3 statement model?
there is no impact.
My understanding is I finish the 3 s Model. And then I build the DCF taking all I need for it from the 3 s model (Net income, D&A etc etc) to calculate my FCF.
For the LBO the same, I use my asusmed financing structure.
Got it, wasn't sure what you meant by that. But yes, you could build a three statement model, and then make a DCF off of that, and then separately build a different three statement model for the LBO. However, if what you're doing is time sensitive, you could also build the three statement model with your assumed financing structure for the LBO, build the LBO, and then build a DCF off that three statement model as well.
Thank you so much. This is for a several hours case study for IB.
Would build 3 s model based on financing for LBO (Alternatively the financing structure given for the model; then the DCF and LBO using the information from the 3s model.
Correct?
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