LBO Modeling Fundamentals: Building Sources and Uses

Understanding how a leveraged buyout (LBO) is funded is the most critical first step in private equity and investment banking. This text-only course guides you through the core principles of structuring transactions, ensuring you can confidently determine where capital comes from and how it is allocated. By reading through clear explanations and working through practical written scenarios, you will transition from a beginner to someone who can construct a robust Sources and Uses table. You will gain a deep understanding of debt and equity dynamics, transaction fees, and how capital structures are designed in modern corporate finance. What you'll learn: 1. Understand the core terminology and mechanics of leveraged buyouts. 2. Identify and classify different types of funding sources, including senior debt, subordinated debt, and sponsor equity. 3. Allocate transaction costs, advisory fees, and debt refinancing requirements under the uses of funds. 4. Construct and balance a standard Sources and Uses table for an LBO transaction. 5. Analyze modern capital structure trends, including unitranche debt and contemporary leverage ratios. 6. Apply foundational financial modeling best practices to ensure transaction equilibrium. The course begins with essential definitions and the underlying theory of leverage, then guides you step-by-step through the mechanics of building a transaction structure, concluding with practical written scenarios to test your understanding. This course is designed for aspiring financial analysts, investment banking candidates, and corporate finance enthusiasts with no prior LBO experience. Start building your foundational private equity skillset today.