Lbo Model

LBO Model Builder

Preflight: Dependency Check

Before starting, verify required libraries and tools are installed and install any that are missing.

bashCopy code
python3 -c "import openpyxl" 2>/dev/null || python3 -m pip install openpyxl
command -v soffice >/dev/null 2>&1 || command -v libreoffice >/dev/null 2>&1 || ls /Applications/LibreOffice.app/Contents/MacOS/soffice >/dev/null 2>&1 || echo "WARNING: LibreOffice not found. Install: brew install --cask libreoffice (macOS) or apt install libreoffice (Linux). Required for scripts/recalc.py."

Important: Do not skip this step — scripts/recalc.py is required to verify IRR/MOIC, cash sweep mechanics, and sensitivity base-case.

Scripts

• scripts/recalc.py — Force formula recalculation via headless LibreOffice. Run after building: python scripts/recalc.py <model.xlsx>

Reference Template

A starter LBO template is bundled at lbo-model.xlsx in this skill directory. If the user does not attach their own template, reuse the bundled file structure (do not copy cell values, only the layout/section conventions).

TEMPLATE REQUIREMENT

• If template attached → use that template's structure exactly
• If no template → ask user, or use standard examples/LBO_Model.xlsx
• NEVER build from scratch when template is provided

CRITICAL INSTRUCTIONS - READ FIRST

Environment: Office JS vs Python

• Office JS: range.formulas = [["=B5*B6"]], no recalc needed
• Python/openpyxl: ws["D20"] = "=B5*B6", run recalc.py before delivery
• Merged cell pitfall: value to top-left first, then merge + format

Core Principles

• Every calculation must be an Excel formula — NEVER compute in Python and hardcode
• Use the template structure — follow existing organization
• Work section by section, verify with user at each step

Formula Color Conventions (4-color system)

• Blue (0000FF): Hardcoded inputs
• Black (000000): Formulas with calculations
• Purple (800080): Links to cells on SAME tab (direct references, no calculation)
• Green (008000): Links to cells on DIFFERENT tabs

Fill Color Palette — Professional Blues & Greys

• Section headers: Dark blue #1F4E79 (white bold text)
• Column headers: Light blue #D9E1F2 (black bold text)
• Input cells: Light grey #F2F2F2
• Formula cells: White
• Key outputs (IRR, MOIC): Medium blue #BDD7EE (black bold)

Number Formatting Standards

• Currency: $#,##0;($#,##0);"-"
• Percentages: 0.0%
• Multiples: 0.0"x"
• MOIC/Detailed Ratios: 0.00"x"

TEMPLATE ANALYSIS PHASE

1. Map the structure — identify sections and relationships
2. Understand the timeline — columns = periods, pro forma column
3. Identify input vs formula cells — respect template conventions
4. Read existing labels — they specify expected calculations
5. Check for existing formulas — don't overwrite working formulas
6. Note template-specific conventions — sign conventions, subtotal structures

FILLING FORMULAS - GENERAL APPROACH

Step 1: Check the Template (existing formula? comment? label? pattern?)

Step 2: Check the User's Instructions

Step 3: Apply Standard Practice

COMMON PROBLEM AREAS

• Balancing Sections: Sources = Uses, one item is "plug"
• Tax Calculations: reference income line + tax rate only
• Interest and Circular References: use Beginning Balance to break circularity
• Debt Paydown / Cash Sweeps: priority waterfall, MAX/MIN to prevent negative
• Returns Calculations (IRR/MOIC): correct signs, consecutive periods
• Sensitivity Tables: ODD dimensions, center cell = base case, #BDD7EE highlight

VERIFICATION CHECKLIST

• Section balancing (Sources = Uses)
• Income projections (subtotals, margins, links)
• Balance Sheet (Assets = L+E, beginning = prior ending)
• Cash Flow (correct signs, ending cash ties)
• Supporting Schedules (roll-forwards balance)
• Debt Schedule (beginning balance, interest, paydown priority)
• Returns (IRR/MOIC correct signs and ranges)
• Sensitivity Tables (ODD grid, center = base, all cells have formulas)
• Formatting (blue/black/purple/green, number formats, no errors)
• Logical Sanity Checks (magnitude, trends, reasonableness)

COMMON ERRORS TO AVOID

| Hardcoding | Wrong cell refs | Circular refs | Sections unbalanced | | Negative balances | IRR/return errors | Sensitivity same value | Roll-forwards don't tie | | Inconsistent signs |

WORKING WITH THE USER — SECTION-BY-SECTION CHECKPOINTS

1. After Sources & Uses → confirm plug, get sign-off
2. After Operating Model → confirm growth rates, margins
3. After Debt Schedule → confirm waterfall logic
4. After Returns (IRR/MOIC) → confirm cash flow signs
5. After Sensitivity Tables → confirm base case lands correctly