Entry Multiple

The EV/EBITDA (or similar) multiple paid to acquire a company at the start of an LBO. Combined with the exit multiple, it determines how much of the return comes from multiple expansion versus operational improvement.

Practise it

A fresh deal every time. Solve MOIC and IRR in your head, check the worked math, and see a returns waterfall break it down.

Open Paper LBO Trainer, free, 8 min

Where Entry Multiple comes up

How to Build an LBO Model: The Build Order That Survives a Modelling TestUnder a 90-minute clock, the build order is the difference between a returns number and a half-finished model.Read the guide — 13 min What a Buyout Fund Looks For in a CompanyThe modelling test tells a fund whether you can build. This tells it whether you can pick, which is the part that is hard to teach.Read the guide — 10 min Paper LBO Example: A Full Walkthrough, Step by StepThe exact sequence to run in your head, a fully worked example, and the shortcuts that make the maths fast under pressure.Read the guide — 9 min

Keep reading

Private Equity interview prep

Related Private Equity terms

LBO (Leveraged Buyout)Exit Multiple Leverage Ratio (Debt/EBITDA)Sponsor Dry Powder Add-On Acquisition

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