LBO Model Sources and Uses: How to Build the Table and Make Both Sides Balance in Excel

An LBO model's sources and uses table shows every dollar that funds a leveraged buyout (sources) and every dollar the deal spends (uses), set out in two columns that have to total the same amount. Uses usually cover the equity purchase price, refinanced debt, fees and cash left on the balance sheet. Sources cover the debt tranches, any rollover equity and the sponsor's equity cheque, which you calculate last as the plug that makes both sides balance.

What the LBO Model Sources and Uses Table Does

The sources and uses table sits near the top of every LBO model, and the rest of the spreadsheet depends on it. The debt schedule takes its opening balances from the table. The returns analysis takes the sponsor's equity cheque from it. The pro forma balance sheet takes goodwill, capitalised financing fees and opening cash from it. If the table is wrong, the IRR is wrong too, and nothing on the returns page will warn you.

Ryan O'Connell's LBO walkthrough puts sources and uses second of five modules, after the pre-LBO income statement and ahead of the debt schedule. Kubicle's tutorial says most inputs to the table come straight from the transaction assumptions and debt assumptions blocks and should be linked there instead of typed in. Both points lead to the same design rule. The table should contain no hardcodes. Each cell either links to an assumption or holds a formula.

The table also has to make sense on the current market. Ropes & Gray's Q1 2025 private equity recap, drawing on PitchBook data, reported average LBO purchase multiples of 11.7x EBITDA in Q1 2025, up from 11.0x in 2024, and average equity contributions of about 52%, up from 50% in 2024. Axios reported in October 2023 that PitchBook LCD data showed equity contributions above 50% for the first time since tracking began in 1997, against a 10-year average of 41% through 2021. If your plug comes out at 25% equity, ask whether the debt sizing is realistic before you send the model to anyone.

Takeaway: before you build anything, set up a separate transaction assumptions block (purchase multiple, leverage by tranche, fee percentages, minimum cash) so the table can link to it.

Building the Uses Side Step by Step

Build the uses side first. It tells you how much money the deal needs, and the sources side exists to fund that number. Here is a worked example used throughout this guide: a target with $50 million of LTM EBITDA, bought at 11.0x, the 2024 average cited above.

Purchase enterprise value. =EBITDA × Multiple, so $50m × 11.0x = $550m. Keep this as a memo line above the table. It does not appear in the table as a use.
Purchase of equity. Enterprise value less the target's existing net debt. With $120m of net debt, the equity purchase price is $430m. For a public target, check it against offer price per share × fully diluted shares (use the treasury stock method for options).
Refinance existing debt. $120m. Most buyouts repay the target's debt because change-of-control clauses require it. If any debt is assumed and left in place, take it off this line and add it to sources as "assumed debt" so the gross totals still match.
M&A advisory and transaction fees. Enter these as a percentage of enterprise value in the assumptions block. This example assumes 2.0%, or $11.0m. Your own figures should come from engagement letters or the merger proxy.
Financing fees. Enter these as a percentage of new debt raised. At an assumed 2.5% on $250m of debt, they come to $6.25m. They get capitalised and amortised over the life of the debt in the model.
Cash to balance sheet. The minimum operating cash the business needs on day one, here $10m.

Total uses come to $577.25m. Add a "% of total" column and an "x EBITDA" column next to the dollar amounts. A reviewer will look at those two columns before anything else.

Takeaway: write each use as a formula linked to an input cell. A typed-in fee figure will not update when the purchase price changes, and the error stays hidden until the numbers stop tying.

The Sources Side: Debt Tranches, Rollover and the Equity Plug

Order sources by seniority: revolver, term loans, notes, rollover equity, then sponsor equity. The worked example breaks down like this:

Revolver: $0 drawn at close. It is still worth showing as a line so the capacity appears in the debt schedule.
Term Loan B: 3.5x EBITDA = $175m.
Senior notes: 1.5x EBITDA = $75m.
Management rollover: $15m.
Sponsor equity (plug): =Total Uses − SUM(all other sources) = $312.25m.

Total equity, rollover included, is $327.25m, or 56.7% of sources. That sits a few points above the roughly 50 to 52% averages in the 2024 to 2025 PitchBook figures. That is reasonable for a company with only 5.0x total leverage capacity. If you want lower equity, you need more debt, and that has to be supported by the lender's view of the credit, not by changing the plug.

Rollover equity shows up on both sides. When Saudi Arabia's PIF agreed to roll its existing 9.9% stake in Electronic Arts into the take-private announced on September 29, 2025, those shares counted as part of the equity purchase price (a use) and as a non-cash equity contribution (a source). Business Today's report on the deal says the roughly $36 billion of equity included both new cash from PIF, Silver Lake and Affinity Partners and PIF's rolled stake. If you model rollover on only one side, the table stops balancing and the cash raised looks bigger than it is.

Takeaway: make sponsor equity the only plug in the table. Size the debt from EBITDA multiples set in the assumptions block, never as a percentage of uses.

How to Make Sources and Uses Balance in Excel

A balanced table comes from how you lay it out. These are the steps I use on every LBO spreadsheet model:

Lay out two blocks side by side. Put sources on the left and uses on the right, each with columns for $, % of total and x EBITDA. Use the same number of rows on both sides so the totals sit on the same row.
Total each side with SUM over the full range. Hand-added totals such as =C5+C6+C7 skip any row inserted later. Use =SUM(C5:C12) with a blank row inside the range so new lines are captured.
Write the plug last. Sponsor equity =Uses_Total − SUM(Sources_excl_Sponsor). Name the range so the formula is readable when you audit it.
Add a check cell. =ROUND(Sources_Total − Uses_Total, 2) should equal 0. Apply conditional formatting to turn it red if it doesn't, and link it to a master check on the cover sheet.
Avoid circular references from fees. If debt is a multiple of EBITDA, financing fees depend only on EBITDA and no circularity arises. If you size debt as a percentage of total uses, the fees feed the debt and the debt feeds the fees, and you will need iterative calculation or a copy-paste macro. Most deals are underwritten on EBITDA multiples, so size debt that way.
Link everything downstream. Opening debt balances in the debt schedule, opening cash on the pro forma balance sheet and the equity cheque in the IRR calculation should all point to the table and never be re-entered.
Stress-test the balance. Change the purchase multiple from 11.0x to 12.0x. The table should rebalance on its own, with sponsor equity rising by $50m plus the extra advisory fee.

Leland's sample model uses the same layout, with enterprise value, transaction fees, financing fees and minimum cash on the uses side and two debt tranches plus sponsor equity as the plug on the sources side. The layout is standard because reviewers expect it. A deal team can review an unfamiliar model faster when the table sits where they expect to find it.

Takeaway: after building the table, change three inputs (multiple, leverage, fee percentage) and confirm the check cell stays at zero each time.

LBO Sources and Uses Examples: Electronic Arts and Twitter

Public deals let you test your template against real numbers.

Electronic Arts, 2025 to 2026

The consortium of PIF, Silver Lake and Affinity Partners agreed to pay $210 per share in cash, a 25% premium to EA's unaffected price of $168.32 on September 25, 2025. TheWrap reported that the roughly $55 billion deal, described as the largest leveraged buyout on record, closed on August 4, 2026, after regulatory approvals arrived on July 30. The financing comprised about $36 billion of equity and $20 billion of debt committed by J.P. Morgan, of which $18 billion was funded at close.

Put into the table, sources come to about $54 billion of funded capital ($36bn equity plus $18bn drawn debt) against a headline value of about $55 billion. The press coverage does not explain the gap of roughly $1 billion. In a working model you would close it from the merger proxy, using the target's balance sheet cash, assumed debt or the fee lines. The undrawn $2 billion goes in the revolver row at zero drawn, with its capacity noted. Equity is about two-thirds of funded sources, well above the PitchBook averages, which tells you that lenders sized the debt to EA's credit, and the sponsors put in whatever equity was needed to reach the price.

Twitter, April 2022

Elon Musk's April 21, 2022 SEC filing set out $46.5 billion of committed financing for his $54.20 per share offer. TheWrap reported $25.5 billion of debt from Morgan Stanley, Bank of America, Barclays and other banks, made up of a $12.5 billion margin loan secured on Musk's Tesla shares and $13 billion of debt secured on Twitter, plus $21 billion of equity from Musk. The margin loan is the modelling lesson here. It is a source of funds for the buyer, but it sits at the investor level and not on the target's balance sheet. Show it as a separate holdco line, so the target's pro forma leverage uses only the $13 billion and the margin loan stays out of the target's leverage ratio.

Takeaway: rebuild EA's table in your template from the proxy statement. The exercise forces you to reconcile the headline price, the funded debt and the rolled equity line by line.

Common Sources and Uses Errors and a Pre-Send Checklist

The same errors show up again and again in LBO models reviewed by associates and in case-study tests:

Mixing enterprise value and equity value. Listing enterprise value as a use and then adding refinanced debt counts the debt twice.
Ignoring existing cash. If the target's cash is used to fund the deal, it is a source. If it stays in the business, it belongs in net debt. Pick one treatment and use it everywhere.
Expensing financing fees. They are capitalised and amortised. M&A advisory fees, by contrast, reduce equity on the pro forma balance sheet.
Hardcoded plug. If someone overwrites the sponsor equity cell with a number, every scenario after that is wrong.
Diluted share count errors. For public targets, leaving out in-the-money options and RSUs understates the equity purchase price.

Before the model leaves your desk, check that the check cell reads zero, that equity as a percentage of sources sits within the current 40 to 55% range or has a written reason for falling outside it, that total leverage in x EBITDA matches the financing term sheet, and that the opening balances in the debt schedule tie to the table.

Takeaway: print the checklist and tape it beside your monitor. Ten seconds per model costs less than one bad IRR in front of an investment committee.

Why a Ready-Made LBO Template Saves Time

The arithmetic in a sources and uses table is simple. The time goes into the structure around it: linked assumptions, a single plug, check cells, rollover on both sides, holdco debt kept apart from opco debt, and fee treatment that flows correctly into the balance sheet. Building that from scratch on every deal is slow and invites mistakes. A tested LBO Excel template gives you a table where the sponsor equity plug, the balance check and the downstream links already work, so you can spend your hours on the purchase price, the debt package and the returns case. ModelStack's IB, M&A and private equity models are built to that standard. Download one, test it on the EA or Twitter figures above, and adapt it to your next deal.