Entry multiple, leverage, growth, cash conversion and exit multiple in; sources and uses, the debt schedule, MOIC, IRR and the four-way value-creation bridge out. The four components sum exactly to the change in sponsor equity value. Every input is encoded in the URL.
Cash interest is charged on the beginning-of-year debt balance. Free cash flow after interest is applied to debt at the sweep percentage; the unswept remainder accumulates as cash. Where free cash flow after interest is negative, cash is drawn first and the balance is added to debt.
Total uses must equal total sources. In a sponsor deal the equity cheque is the residual, which is why it moves whenever any other line moves.
Fees are pure equity leakage: they buy no asset and never come back.
Interest is charged on the opening balance, so paydown accelerates over the hold even at constant EBITDA. Where a margin change is supplied, revenue is implied from the entry margin and EBITDA becomes Rev_0 * (1+g)^n * (m_0 + Δm * n/t), with the margin moving straight-line.
IRR is solved numerically by bisection on the discount rate, not by annualising MOIC. With one outflow at t=0 and one inflow at t the two agree, and IRR = MOIC^(1/t) - 1; any interim cash flow breaks that identity while the numerical solve still holds.
The cross-term between growth and multiple change has to be assigned to one component or the other. The convention here values the multiple change on exit EBITDA, which assigns the cross-term to multiple expansion. Valuing growth at the exit multiple and the multiple change at entry EBITDA also ties and produces a different-looking split of the same total, so ask which convention a bridge uses before comparing two of them. The paydown bar is net of any cash build so that the four components sum to the equity change in every case, including a partial sweep.
Because the closing debt balance itself depends on the operating case, the exit-multiple solve and the growth solve are not independent. The growth figure above holds the debt schedule at the current case; the calculator also reports the growth rate found by re-running the schedule at each candidate growth rate, which is lower because faster growth generates more cash to sweep.
Entry EBITDA 100.0, entry multiple 10.0x, fees 3.0 percent of enterprise value, debt 500.0 at 6.0 percent cash interest, unlevered free cash flow 60 percent of EBITDA, EBITDA growth 5.0 percent per year, a 100 percent cash sweep, a five-year hold, and a 10.0x exit. These are the defaults above.
| Year | Beginning debt | EBITDA | Unlevered FCF | Cash interest | Debt paydown | Ending debt |
|---|---|---|---|---|---|---|
| 1 | 500.00 | 105.00 | 63.00 | 30.00 | 33.00 | 467.00 |
| 2 | 467.00 | 110.25 | 66.15 | 28.02 | 38.13 | 428.87 |
| 3 | 428.87 | 115.76 | 69.46 | 25.73 | 43.73 | 385.14 |
| 4 | 385.14 | 121.55 | 72.93 | 23.11 | 49.82 | 335.32 |
| 5 | 335.32 | 127.63 | 76.58 | 20.12 | 56.46 | 278.87 |
| Cumulative | - | 580.19 | 348.11 | 126.98 | 221.13 | 278.87 |
Every parameter is optional; omitted parameters take the base-case default. Percentages are entered as numbers, so 6 means 6 percent. All computation happens in the browser and no request leaves the page.
| Parameter | Meaning | Default |
|---|---|---|
ebitda | Entry EBITDA, in any consistent unit | 100 |
entry | Entry EV/EBITDA multiple | 10 |
exit | Exit EV/EBITDA multiple, applied to exit-year EBITDA | 10 |
debt | Debt at entry in turns of entry EBITDA | 5 |
rate | Cash interest rate, percent, on the opening balance | 6 |
growth | Compound annual EBITDA growth, percent | 5 |
margin | Total change in EBITDA margin over the hold, percentage points, straight-line | 0 |
emargin | Entry EBITDA margin, percent. Only used when margin is non-zero, to imply revenue | 20 |
conv | Unlevered free cash flow as a percent of EBITDA | 60 |
years | Holding period in whole years | 5 |
fees | Transaction and financing fees, percent of entry enterprise value | 3 |
sweep | Share of free cash flow after interest applied to debt, percent | 100 |
target | Target IRR, percent, for the inverse solves | 20 |
The base case:https://m-a.wiki/calc/?ebitda=100&entry=10&exit=10&debt=5&rate=6&growth=5&conv=60&years=5&fees=3
Two turns of multiple expansion on the same operating case:https://m-a.wiki/calc/?ebitda=100&entry=10&exit=12&debt=5&rate=6&growth=5&conv=60&years=5&fees=3