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Practice Tests / 6-Hour Carve-Out LBO and Investment Write-Up

  • 6 hours
  • Excel model + write-up
  • Blank workbook
  • Private equity

6-Hour Carve-Out LBO and Investment Write-Up

Read a 38-page memorandum, build a three-statement LBO from a blank workbook and say what the firm should pay in two pages.

You get the test, a worked answer key, the write-up and model I sent and a two-page debrief.

Kestrel Steering Systems, a fictional company · Recreated from a test I took in October 2023

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What you are given

A one-page prompt and a 38-page memorandum. No template.

This is a page from the test. Select it to read it at full size.

The assignment page of 6-Hour Carve-Out LBO and Investment Write-Up
The assignment. Page 1 of the test, as you receive it. Open the PDF

What the test asks

  • Read a 38-page memorandum on a maker of steering gears for heavy trucks that its parent company is selling.
  • Build a working, flexible three-statement LBO model from a blank workbook, with five projected years and a returns analysis. The price, the financing and the operating assumptions are yours.
  • Write no more than two pages: opportunities and risks, diligence questions, and a recommendation with a valuation.
  • Say what the firm should pay, not what it should bid to reach the next round.
  • All of it in six hours.

What the answer looks like

The answer key is a complete model you can check yours against line by line, with a note wherever it differs from what I sent. This example is from the free test, so nothing here gives this case away.

From the answer key of the free testEnlarge
The income statement of the free test's answer key, December 2025 to December 2030, from revenue to net income

The note on the Taxes row

<- Got this wrong on the day: in the 60-minute file (row 27) this was EBT x (1 - tax rate), which is after-tax income, and cash taxes read it. Tax is EBT x the tax rate.

Take the free 60-minute test to see a full answer key and debrief

What you get

Start here.pdf1 page

1 - The test

1 - The assignment.pdf1 page

2 - Confidential information memorandum.pdf38 pages

2 - My answer

1 - Answer key (corrected model).xlsxcheck yours against this

2 - The write-up I sent.pdf2 pages

3 - The model I sent.xlsx

3 - Debrief

Debrief.pdf2 pages

Who it is for

  • Anyone facing a case that pairs a memorandum with a clock and no template.
  • You should already be able to build a three-statement LBO. This tests whether you can read 38 pages, build from a blank sheet and commit to a price in one sitting.
  • Six hours for the attempt and about one more to compare and read the debrief.

The story

In the fall of 2023 a recruiter put me in front of a private equity firm that was hiring an associate to start the following summer.

After two rounds of interviews, the firm's case study arrived by email on a Saturday morning in October: a prompt and a 38-page memorandum on a business that its owner was selling. No model template came with it. I had six hours to send back a working three-statement LBO model and a write-up of no more than two pages, with what I liked, what worried me, what I would ask in diligence and what the firm should pay.

The write-up and the workbook went back at the end of the six hours. The firm then scheduled a 45-minute video call to go through the case.

Before you start

Is this the real test?

It is recreated from the test I took. The format, the task and the time limit are the same. The company is fictional and its figures are changed.

Why two models?

One is the file I sent. The other is the same file corrected, with a grey note on every row that changed. Check your numbers against the corrected one.

Did the corrections matter?

Yes. I set my own growth rates and the model kept running on management's revenue. Making my rates drive revenue takes the five-year return from 26.4% to 22.2% on its own, and the corrected model returns 22.3%, below the 25% hurdle in my write-up. The debrief lists each fix with its rows and what it was worth.

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