accounting-flow — Private Equity Practice Questions

55 free Private Equity questions on accounting-flow: 8 easy, 38 medium, and 9 hard, every one exam-realistic and fully explained once you sign in. This is the fastest way to turn accounting-flow from a weakness into a scoring area — drill it in 10-question reps with immediate feedback.

Drill accounting-flow free with full explanations →

1. An acquisition of a company with $50M EBITDA is priced at a 10.0× multiple. The transaction uses $200M in debt
2. If all other items are constant, what is the Free Cash Flow to Equity (FCFE)?
3. When modeling the three financial statements in an LBO, how does a $10M increase in Depreciation in Year 2 imp
4. A target company has $200M of Assets, $120M of Debt, and $80M of Book Equity. If a sponsor pays $300M for 100%
5. A PE firm acquires a target for $500M, which has $100M in identifiable net assets at book value. If an apprais
6. With a 25% tax rate and a 10% discount rate, what is the approximate Net Present Value (NPV) of the tax shield
7. Under US GAAP, how does an increase in depreciation of $10M affect the three financial statements (assuming a
8. In a 3-statement model, how does a $10 million increase in depreciation affect the financial statements (assum
9. Under standard GAAP accounting, how is OID treated on the income statement over the life of the debt?
10. If all other transaction parameters are identical, how much higher will the Goodwill be in the stock deal?
11. What is the Cash Flow from Operations (CFO)?
12. If the Goodwill is impaired by 50M, what is the impact on the DTL?
13. How does PIK interest appear in the Cash Flow from Financing (CFF) section of the Cash Flow Statement in the y
14. If we ignore taxes, what is the Goodwill?
15. What is the 'leverage effect' after a dividend recap is completed?
16. In Year 2, what is the interest expense recorded on the Income Statement?
17. In a Sources and Uses table for a dividend recapitalization, which of the following is categorized as a 'Use'?
18. A sponsor wants to maintain a 15% IRR. If they expect a lower exit valuation than originally planned, how does
19. How does the 'Fair Value' adjustment of a target's existing debt affect Goodwill if the debt is assumed (not r
20. If a sponsor's entry equity was $200M and they receive a $200M dividend, what is their 'Net Investment' remain
21. What is the primary structural objective of a dividend recapitalization in a leveraged buyout context?
22. A sponsor acquires a business with a $40M net pension defici… — How should this be treated in the enterprise-t
23. In an LBO model, if PIK interest is capitalized, how does it affect the 'Equity Plug' s & Uses table at entry?
24. What is the pro-forma Net Debt / EBITDA ratio?
25. If SOFR is 5%, what is the impact of the Mezzanine interest on the Year 1 Cash Flow Statement?
26. What is the new ratio (assuming EBITDA is constant)?
27. What is the impact of a dividend recap on the 'Cash Conversion Cycle' of a business?
28. Calculate the pro-forma leverage of a company with $200 million in LTM EBITDA that raises a new $1.2 billion U
29. How does PIK interest impact the levered Free Cash Flow (LFCF) of a business?
30. If the corporate tax rate is 20%, what is the annual cash tax shield generated by this step-up?