In private equity, financial modeling typically consists of building leveraged buyout (LBO) models to evaluate the return profile of acquiring a business. The main metrics that are used in a private equity financial model include the internal rate of return (IRR), cash on cash return, net present value (NPV), debt/EBITDA ratio, debt/equity ratio, and other rates or return or leverage.
CFI is a the official global provider of financial modeling and valuation analyst FMVA Designation. CFI's mission is to help anyone become a world-class financial analyst and has a wide range of resources to help you along the way. In order to become a great financial analyst, below are some additional questions and answers for you to explore further: