I am currently preparing for a few upcoming PE-interviews and I have a question concerning the LBO modelling tests you typically do in the second round ("standard" 90-120 minute test, building model from completely blank spreadsheet).
When creating the debt schedules, should I always add a liquidity facility covering eventual liquidity shortfalls stemming from e.g. operating cash flows, interest payments and mandatory repayments even if this has not been specified in the test instructions? E.g. it is specified in the test that an acquisition facility and term loan [x], [y] were raised to fund this acquisition but nothing more. Would you recommend me to include a liquidity facility based on above-mentioned reason because this would reflect reality better?
Just conscious that this would demand even more time, and will also add to the numbers of assumptions that will get scrutinised.
I am fairly certain my question has not been addressed by the other PE interview LBO modelling test threads here on WSO. Apologies if it has!
Thank you all,
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