Returns analysis
Exit value, MOIC, IRR and the bridge.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: returns analysis.Updated 30 September 2026
What it does
The answer sheet of a buyout. Exit EBITDA times the exit multiple gives enterprise value; less net debt on that date gives the equity; divided by the equity invested gives the multiple of money; annualised over the hold gives the IRR. A value-creation bridge then says how much of the gain came from earnings growth, how much from the multiple, and how much from paying debt down.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Assumptions, row 43: Exit multiple, EV / EBITDA
- Returns, rows 6–9: Exit EBITDA (Year 5), Exit enterprise value, Less net debt at exit, Exit equity value
- Returns, rows 12–18: Total equity invested at close, Equity cash flows, Multiple of money (MOIC), IRR…
- Returns, rows 21–27: EBITDA growth at the entry multiple, Multiple expansion on exit EBITDA, Debt paydown (net debt at close less at exit), Less fees paid at close…
What a reviewer looks for
- IRR computed on the wrong number of years.
- Net debt at exit taken from the wrong year.
- A bridge that does not add up to the gain, because the fees were forgotten.
Learn it, then build it
Understand · Primer
LBO Mechanics & Returns
Build · Lab · ~3 min
IRR by Eye
Say the IRR for any multiple and hold before the interviewer finishes the sentence, and the multiple for any IRR.
Build · Lab · ~8 min
Paper LBO Trainer
Solve MOIC and IRR in your head from a deal you have never seen, in under ten minutes.
Build · Lab · ~12 min
Napkin LBO
Sketch a full buyout by hand, from sources and uses through the debt paydown to the return, and say which bucket the return depends on.
Read · Guide · 13 min
How to Build an LBO Model: The Build Order That Survives a Modelling Test
Read · Guide · 8 min
LBO Interview Questions: The Conceptual Ones Behind the Maths
Vocabulary: IRR, Leverage Model.