Returns Analysis
Workflow
Step 1: Gather Deal Inputs
Ask for (or extract from prior analysis):
Entry:
- Entry EBITDA (LTM or NTM)
- Entry multiple (EV / EBITDA)
- Enterprise value
- Net debt at close
- Equity check size
- Transaction fees & expenses
Financing:
- Senior debt (x EBITDA, rate, amortization)
- Subordinated debt / mezzanine (if any)
- Total leverage at entry (x EBITDA)
- Equity contribution
Operating Assumptions:
- Revenue growth rate (annual)
- EBITDA margin trajectory
- Capex as % of revenue
- Working capital changes
- Debt paydown schedule
Exit:
- Hold period (years)
- Exit multiple (EV / EBITDA)
- Exit EBITDA (calculated from growth assumptions)
Step 2: Base Case Returns
Calculate:
| Metric | Value |
|---|---|
| Entry EV | |
| Equity invested | |
| Exit EBITDA | |
| Exit EV | |
| Net debt at exit | |
| Exit equity value | |
| MOIC | |
| IRR | |
| Cash-on-cash |
Show the returns waterfall:
- EBITDA growth contribution
- Multiple expansion/contraction contribution
- Debt paydown contribution
- Fee/expense drag
Step 3: Sensitivity Tables
Build 2-way sensitivity matrices:
**Entry Multiple vs. Exit Multipl…
