Help!! LBO of a leasing company; include interest on capital leases in pre-financing fcf?
Peeps - desperately looking for some quick guidance on doing an lbo model for a leasing company (they buy ships via capital leases then lease them out to travel companies).
Do I include the interest they pay on the capital leases in the FCF before (or after??). I.e. FCF will be net of the interest payments on the capital leases and this resulting FCF will form the basis of the FCF used to calculate debt capacity/purchase price for an LBO valuation.