LBO Model
LTM Income Statement
Now, let's calculate the target's last-twelve-month ("LTM") income statement. To do so, we simply take the last fiscal year results, add the most recent...
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Stub Period
In many cases, there will be a period of time between the transaction closing date and the date of the next fiscal year-end. In our case, this is 2 months....
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Balance Sheet Set-Up
Now that we've begun to build our income statement let's switch gears and set up our balance sheet. For now, we are going to simply plug in historical...
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Fully-Diluted Shares Outstanding
Now, let's calculate the target's fully-diluted shares outstanding ("FDSO"), as we will need this figure to calculate enterprise value in the next step....
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Enterprise Value
Now that we have calculated the target's fully-diluted shares outstanding ("FDSO"), let's compute enterprise value at the assumed purchase premium. The...
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