After reviewing hundreds of LBO models from associate candidates and junior analysts, the same three mistakes come up over and over. If you're building models for PE interviews or live deals, fix these immediately.

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1. Hardcoding the exit multiple

Your entry multiple and exit multiple should never be the same hardcoded number. The exit multiple needs to be sensitized independently. Partners will ask "what happens if we exit at 8x instead of 10x?" — if your model breaks when you change that, you're done.

2. Ignoring working capital dynamics

Most junior analysts model revenue growth but leave NWC flat or as a static % of revenue. In reality, fast-growing companies consume cash through working capital. If your target is scaling from $50M to $200M in revenue, the NWC build can materially impact your FCF — and therefore your debt paydown and returns.

3. Circular references in the debt schedule

This is the classic trap. Interest expense depends on average debt balance, which depends on mandatory repayments, which depend on cash flow, which depends on interest expense. If you're not using an iterative solver or a circuit breaker toggle, your model will either circular-ref error or silently give wrong answers.

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These aren't edge cases. These are the fundamentals that separate a model that gets you the job from one that gets your resume moved to the reject pile.

Want the full framework? Inside Meridian Capital Academy, we build every one of these from scratch — Sources & Uses through returns analysis — with the same rigor expected at top PE firms.