returns-analysis

name	returns-analysis
description	Use this skill when sizing up a deal, stress-testing assumptions, or preparing IC returns exhibits
executor	LLM_BEHAVIOR
skill_id	finance.private_equity.returns_analysis_2
status	ADOPTED
security	{"level":"high","pii":true,"approval_required":true}
anchors	["finance","testing","ai_ml","design"]
tier	2
input_schema	[{"name":"code_or_task","type":"string","description":"Code snippet, script, or task description to process","required":true}]
output_schema	[{"name":"report","type":"string","description":"Analysis report or summary from returns analysis"}]

Returns Analysis

description: Build quick IRR/MOIC sensitivity tables for PE deal evaluation. Models returns across entry multiple, leverage, exit multiple, growth, and hold period scenarios. Use when sizing up a deal, stress-testing assumptions, or preparing IC returns exhibits. Triggers on "returns analysis", "IRR sensitivity", "MOIC table", "what's the return at", "model the returns", or "back of the envelope".

Workflow

Step 1: Gather Deal Inputs

Ask for (or extract from prior analysis):

Entry:

• Entry EBITDA (LTM or NTM)
• Entry multiple (EV / EBITDA)
• Enterprise value
• Net debt at close
• Equity check size
• Transaction fees & expenses

Financing:

• Senior debt (x EBITDA, rate, amortization)
• Subordinated debt / mezzanine (if any)
• Total leverage at entry (x EBITDA)
• Equity contribution

Operating Assumptions:

• Revenue growth rate (annual)
• EBITDA margin trajectory
• Capex as % of revenue
• Working capital changes
• Debt paydown schedule

Exit:

• Hold period (years)
• Exit multiple (EV / EBITDA)
• Exit EBITDA (calculated from growth assumptions)

Step 2: Base Case Returns

Calculate:

Metric	Value
Entry EV
Equity invested
Exit EBITDA
Exit EV
Net debt at exit
Exit equity value
MOIC
IRR
Cash-on-cash

Show the returns waterfall:

• EBITDA growth contribution
• Multiple expansion/contraction contribution
• Debt paydown contribution
• Fee/expense drag

Step 3: Sensitivity Tables

Build 2-way sensitivity matrices:

Entry Multiple vs. Exit Multiple