Sample Videos: 2-Minute Finance Education

"How much capital needs to be tied up in your short term obligations - your day-to-day operatons - and therefore cannot be put to you elsewhere, cannot be put to use to pay down debt, cannot be used for long-term investments like Capex or M&A. So an increase in working capital, when your operating current asset are growing faster than your operating current liabilities, what that indicates is an additional investment that's needed; an allocation of resources." - I dive into the collections piece (A/R vs. A/P) in a subsequent video, so don't you worry!

Leveraged Buyouts, or LBOs, can be a difficult concept to grasp for those newer to the world of finance. In two minutes, I aim to demonstrate just how simple they really are. As always, my focus is on instilling a basic, conceptual understanding of what it all actually means - what it represents. Let's drop the numbers and the formulas and talk big picture. LBOs are not theoretical, and they are not merely numbers on a spreadsheet. They are as real as it gets - an investment strategy employed by PE funds across the globe utilizing high volumes of debt (i.e., leverage) to maximize returns upon exit. More debt with favorable rates means less upfront cash required by the sponsor. Once you grasp LBOs at a high level, when you can visualize them (hopefully after this short video), the numbers and formulas become the easy part: no memorization needed.