In an LBO, the revolver plugs cash gaps, but interest expense reduces net income, which changes cash, which changes the revolver draw. You must use manual circularity breaks (the "copy-paste" method) or enable iterative calculations. Pro tip: Never leave iterative calculations on in a live test—the interviewer will notice.
The PE case study (often received as a PDF packet) is the single most decisive round in recruiting for top firms (KKR, Blackstone, Carlyle, etc.). It tests not just valuation skills, but investment judgment, operational diligence, and deal structuring under time pressure. Candidates are typically given 60–90 minutes to analyze a PDF containing company financials, industry data, and a transaction summary.
When the recruiter sends you the PDF, you will be tempted to open Excel immediately. Stop. Spend the first 30 minutes just reading and annotating.
Create a "Risk Register" on a piece of paper. Look for these three killers in the PDF: private equity interview case study pdf
Once you identify these, your model becomes defensive. You will get more credit for flagging the risk of a liquidity crunch than you will for a perfectly formatted Excel sheet.
PE funds pay for Normalized EBITDA, not GAAP EBITDA.
Interview Scenario: If EBITDA is $10M, but the founder pays himself $500k below market (market rate $1M), what is the adjusted EBITDA? ($10M - $500k = $9.5M – Lower EBITDA means higher multiple, be careful). In an LBO, the revolver plugs cash gaps,
| Resource | Focus Area | |----------|-------------| | BIWS PE Guide (PDF case examples) | Full LBO modeling + memo writing | | Street of Walls – LBO Model | Paper LBO speed drills | | PEI – Private Equity Case Studies | Real fund-level examples | | McKinsey / Bain PE practice tests | Operational due diligence |
Before you even open Excel, you will face the Paper LBO. This is often conducted on a legal pad, but the output is a mental PDF in your head.
Sample Prompt (Verbal): "A fund buys a company for $100 million using 5x debt. Year 1 EBITDA is $10M. It grows EBITDA by 20% and pays down $2M of debt per year. After 3 years, they sell it for the same multiple. What is the IRR?" Once you identify these, your model becomes defensive
How to win this (Mental PDF calculation):
Pro Tip: Print a "Paper LBO Cheat Sheet" PDF and tape it to your monitor while practicing.
Most candidates assume it is purely about Excel speed. It is not. Partners care less about your exact growth assumption and more about your risk identification.
They are looking for three specific traits:
Bottom line: The PDF case study is not just about correct math – it tests your ability to identify the fulcrum of the investment decision. Always end with a clear, defendable “Invest” or “Pass” supported by three bullets of logic.