Still struggling with LBO mechanics despite repetition. What am I missing?

Hi there,
If you’ve been putting in reps and still feel shaky with things like debt tranches, interest calcs, or cash sweeps, that’s usually a sign that you’re memorizing steps without fully locking in the logic behind them. And when you're under pressure, that memorized stuff falls apart fast.

This isn’t unusual. LBOs are dense, and most guides teach them like you’re assembling IKEA furniture—"click this into that"—without explaining why it’s designed that way. It feels mechanical, not intuitive.

When you step back, the whole LBO model is really just a story about using someone else’s money to buy a company, generate cash, and pay that money back over time. The model is trying to answer: Will this company generate enough cash to comfortably pay back debt, and will there be anything left for the investor?

If you're forgetting parts or getting stuck explaining things out loud, it's probably because you don’t yet have a mental map where each part flows into the next. You’re juggling too many isolated details instead of seeing the through-line. That makes it hard to improvise when things go off-script, like in a case interview or timed test.

A better way to learn might be to zoom in and practice just one part at a time, and focus on why it works—not just what formula goes where. Like: What’s the point of a cash sweep? How does it affect the rest of the model? Can you explain that in plain terms without opening Excel? If not, that’s your cue to slow down and rebuild your intuition there.

Also, try teaching it to someone else—seriously. If you can walk a friend through a debt schedule or cash flow waterfall without notes, it means you truly understand it.

Want to pick one specific area you’re stuck on and work through it slowly together? Could be interest calc logic, cash sweep mechanics, or how different tranches behave.

Best,
Harrshit M Kansal, CFA, MBA

You're not alone! LBOs are complex, and it’s normal to stumble at first. 

This sounds like a mix of reps and mindset. Repetition will help with fluency, but also focus on understanding the "why" behind each step, not just the mechanics. For example, instead of memorizing cash sweep logic, ask: Why does it matter to the sponsor? 

Practice explaining concepts out loud in simple terms. that builds clarity and confidence under pressure. Try breaking cases into smaller drills (e.g., just model the debt schedule), then reassemble. Happy to review one of your models if helpful!

Hey, There! 
It's definitely frustrating to feel like you're hitting a wall with LBO mechanics even after putting in the reps. It might not just be about doing more cases, but perhaps shifting how you're thinking about them.

Instead of just going through the motions of building the model, try to really understand the why behind each step. For example, with debt tranches, think about the different risk profiles and how that translates into the interest rates and repayment schedules. For cash sweeps, visualize how the excess cash flow is actually being used to pay down debt and why certain tranches get prioritized. Maybe even try drawing out the flow of funds on a whiteboard as you work through a case. Explaining the logic to yourself, step by step, can be way more helpful than just plugging in numbers. And when you practice explaining it out loud, focus on the story of the LBO – what's the investor's strategy, and how do the mechanics of the debt and cash flow support that? Sometimes, seeing the bigger picture can make the details click. Keep at it – you'll get there!

Hey

Struggling with LBO mechanics is more common than it seems, especially when you've already gone through multiple cases and still find parts like debt tranches or interest calculations confusing. The problem isn’t just about the number of reps, but about how you're processing the information. If you're simply following the steps without deeply understanding the rationale behind each one, it’s easy to get stuck when trying to explain the logic clearly, especially under time pressure.

Take the example of Blackstone’s acquisition of Hilton Hotels. It’s a textbook LBO case—Blackstone used significant leverage, structured multiple debt tranches, and relied heavily on Hilton’s operating cash flows to pay down debt over time. Understanding why that deal worked (steady cash flows, global brand strength, opportunity for operational improvement) can help make the mechanics less abstract. When you look at it as a story—buying a strong asset with mostly borrowed money, improving it, and selling it later—you begin to see why each part of the model exists.

It can also help to break down the model and focus on individual sections rather than tackling the full build each time. Try isolating just the debt schedule or interest calculations and running a few small variations. This gives your brain space to really grasp the logic, instead of juggling ten things at once. And once you're more comfortable with the parts, start explaining them out loud in plain language—if you can walk through the Hilton LBO as if you’re telling a story, you’re already building interview-ready confidence.

Lastly, pressure is its own hurdle. Practicing the LBO framework without Excel in front of you can sharpen your ability to think clearly in interviews. What happens if you add more debt? What if revenue drops 10%? These mental reps train you to not just build the model, but actually understand it. Keep going—you’re not far off. Sometimes, it just takes one solid explanation or real-world example to make everything click.