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← Series 79: Collection, Analysis & Evaluation of Data
Series 79 practice questionmediumFinancial Modeling

What is the primary purpose of a sources and uses table in an acquisition model?

  1. ATo forecast revenue by customer segment
  2. BTo calculate public company beta
  3. CTo show exactly how the transaction will be funded and where the proceeds will go✓ Correct answer
  4. DTo estimate share-based compensation expense
Explanation

Why C — To show exactly how the transaction will be funded and where the proceeds will go

To show exactly how the transaction will be funded and where the proceeds will go Sources identify cash raised from debt, equity, or seller rollover, while uses identify purchase price, fees, and debt repayment. A balanced sources and uses table is one of the first control checks in any M&A or LBO model.

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