Sources And Uses

This question tests whether you understand how an LBO is funded and why the model starts by balancing transaction needs against financing sources. Candidates should be able to explain how the uses side captures everything required to complete the acquisition, such as the purchase price and deal related costs, and how the sources side shows the mix of debt, sponsor equity, and any other capital used to fund it. Interviewers ask this because it checks core modeling fluency, attention to transaction mechanics, and the ability to connect the purchase of a company with the capital structure used to pay for it.