We want our LBO model to have the flexibility to consider multiple operating scenarios (i.e. different levels of operating performance that are reflected in the income statement). The three scenarios we consider here are an up-side case, a down-side case, and a Wall Street analyst case. You might also include a management case if you have been provided with detailed management projections for the target. The analyst case is simply pulled directly from the income statement we created in the previous step, and the other cases represent your views how good or bad the target’s performance might be. In addition to entering these operating cases, we created an input cell that allows us to select from any of these hypothetical cases with the flip of a switch and flow the operating assumptions through the model.