Practice · graded on a filing

Basic LBO — AAPL

Build it from AAPL’s latest annual filing. Every line you enter is checked by code against the filing.

What this drill asks

Size an entry enterprise value off an EBITDA proxy, split it into debt and sponsor equity at a stated leverage, grow EBITDA at a stated rate, exit at a stated multiple, and work out the multiple of invested capital and the annualized rate that multiple implies. Every figure you are given comes from AAPL’s latest annual filing and is cited below; the assumptions are handed to you and are never graded. Nothing here is a view on the company.

Match the AI

You–/8

AI model8/8

An AI model worked this exact drill and got 8 of 8 lines right. Match it.

Claude Sonnet 5, given the same filed figures and stated assumptions you see, scored by the same grader. One run, on 2026-09-28, not retried. It does arithmetic on this filing only and never forms a view on the company.

Reconcile AAPL's model from the filed figures below (as of 2025-09-27). Derive each linked line in the unit its label names — the model must reconcile end to end.

Given (filed figures)

Operating income (FY2025, filed): $133,050,000,000
Depreciation & amortization (FY2025, filed): $11,698,000,000
EBITDA proxy — operating income + D&A (not a filed line item): $144,748,000,000

Stated assumptions — given to you, not filed

Entry multiple, EV/EBITDA (stated assumption — not a filed figure): 10×
Debt at entry, % of enterprise value (stated assumption): 60%
Exit multiple, EV/EBITDA (stated assumption — not a filed figure): 11×
Annual EBITDA growth (stated assumption — not a filed figure): 6%
Hold period (stated assumption): 5 years

Derive the linked lines

Entry enterprise value — EBITDA proxy × 10× entry multipleDebt at entry — 60% of entry enterprise valueSponsor equity at entry — entry enterprise value less debtExit-year EBITDA — grow the proxy at 6% for 5 yearsExit enterprise value — exit-year EBITDA × 11× exit multipleEquity at exit — exit enterprise value less the debt still outstandingMultiple of invested capital — exit equity ÷ sponsor equity at entryAnnualized rate implied by that multiple over 5 years, in percent

Apple Inc. 10-K (FY2025, period ended 2025-09-27), accession 0000320193-25-000079, via SEC EDGAR

Educational use only — not investment advice.

In the interview

“Walk me through a basic LBO.”

The 30-second answer

Buy the company at an entry multiple of EBITDA, fund most of the price with debt and the rest with sponsor equity, grow EBITDA over the hold, sell at an exit multiple, repay the debt, and what is left is the sponsor's equity. Divide exit equity by entry equity for the multiple of money, and annualize it over the hold for the IRR.

Why it works: Debt magnifies the equity return. The sponsor puts in a small slice of the price, and every dollar of growth in enterprise value, plus every dollar of debt repaid, accrues to that slice. Returns come from three places: EBITDA growth, multiple expansion and paying down debt.
The common trap: Computing the return on enterprise value instead of on equity. The sponsor's cheque is entry equity, and its return is exit equity after the debt is repaid. Using enterprise value on either side understates the leverage effect.

The full mechanics · 6 steps

01Entry enterprise value = EBITDA × entry multiple.
02Debt = the stated leverage share of entry enterprise value; sponsor equity is the rest.
03Exit EBITDA = EBITDA grown at the stated rate for the hold period.
04Exit enterprise value = exit EBITDA × exit multiple.
05Exit equity = exit enterprise value less the debt still outstanding.
06MOIC = exit equity ÷ entry equity; IRR = MOIC to the power (1 ÷ years), less one.

Comes up inPE paper LBOIB superdayModeling test

How this is graded

Operating income and depreciation & amortization, as filed in the latest annual report. Each cell is checked against the value the same pipeline derives from that filing, inside a small tolerance band, and the model has to reconcile end to end. There is no language model in the grade — it is arithmetic over filed figures, so it returns the same verdict every time. The correct values are not in this page: they are recomputed on the server when you submit, and your entries are read as a submission, never as the answer.

Every attempt ends in a review. Each line is marked Best, Inaccuracy, Mistake or Blunder by how far it is off, and the first line that went wrong is flagged, so an error carried through the rest of the model is fixed once, where it started.

Signed out, nothing is recorded: work it as many times as you like. Signed in, each graded attempt is saved to your account so your dashboard can track it.

The same model, other filers

Each one is built from that company's own annual filing and graded the same way.

MSFT · basic lbo NVDA · basic lbo AMZN · basic lbo

Other models on AAPL

AAPL · accretion / dilution AAPL · comps (fundamentals)AAPL · three-statement linkage

Terms this model is built from

EBITDA EV/EBITDA Enterprise value

Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.

“Walk me through a basic LBO.”

The 30-second answer

Why it works

Debt magnifies the equity return. The sponsor puts in a small slice of the price, and every dollar of growth in enterprise value, plus every dollar of debt repaid, accrues to that slice. Returns come from three places: EBITDA growth, multiple expansion and paying down debt.

The common trap

Computing the return on enterprise value instead of on equity. The sponsor's cheque is entry equity, and its return is exit equity after the debt is repaid. Using enterprise value on either side understates the leverage effect.

The full mechanics · 6 steps

01Entry enterprise value = EBITDA × entry multiple.
02Debt = the stated leverage share of entry enterprise value; sponsor equity is the rest.
03Exit EBITDA = EBITDA grown at the stated rate for the hold period.
04Exit enterprise value = exit EBITDA × exit multiple.
05Exit equity = exit enterprise value less the debt still outstanding.
06MOIC = exit equity ÷ entry equity; IRR = MOIC to the power (1 ÷ years), less one.

Comes up inPE paper LBOIB superdayModeling test

How this is graded

Signed out, nothing is recorded: work it as many times as you like. Signed in, each graded attempt is saved to your account so your dashboard can track it.