LBO assume PE acquire company through debt and cash run it for several years -at end of time

e period sell it for return on their investment step 1 make transaction assumptions about the purchase price debt and cash that will be used step 2 make sources and uses schedule where funds are coming from and where they are going to step 3 adjust balance sheet for adjustments like goodwill and intangibles being created step 4 - project all 3 statements for company and make debt schedule to show how debt changes over time and what kind of interest expense they are paying

Cash flow to repay debt NI + non cash charges change in working capital - CapEx step 5 figure out the return the firm is getting how much cash they are putting in and what they are getting back to figure out irr