Northstar pilot — student decision assignment

Read the fictional packet before calculating. Do not consult the instructor resolution until you have submitted a model and recommendation.

Reconstruct the broker's $800,000 claim and determine recurring managed EBITDA from the source expenses and replacement organization. Build a source-balance check and normal NWC definition. Apply the preliminary multiple range while labeling it fictional rather than an observed comp sample.

Rebuild the six operating DCF years specified in Document 14, discount the five explicit years plus terminal value and compare operating EV with the proposed price and fictional comp range. Distinguish prospective growth valuation from historical credit evidence.

Construct total uses including the estimated NWC price reduction, restoration investment, fees and minimum cash. Calculate the guaranty fee from the stated guaranteed portion and brackets. Determine sponsor equity and compare it with both the $550,000 sponsor limit and the applicable Initial Acquisition minimum. Do not count the standby note as cash or assume qualifying injection credit is the same as economic equity.

Build all 120 senior debt rows. Calculate Year 1 cash interest, principal, taxes, CFADS, cash coverage and residual cash. Model complete loss of the largest customer using contribution and avoidable costs, not just its revenue percentage. Test an illustrative 1.25x buyer cash covenant and separately identify the lender's actual accepted historical definition as unresolved.

Write the commercial LOI issues and a diligence gate tracker. Explain why the proposed earnout and indefinite transition cannot simply be accepted under the stated SBA Initial Acquisition route. Produce a closing conditions list and a first-100-days dashboard even if you recommend declining the deal.

Submit a linked spreadsheet, three-page decision memo and evidence register. Score earnings and source reconstruction at 20 points, funding/debt at 25, downside at 20, legal/lender gates at 20, and transition planning at 15. Pass at 80/100 plus no hidden funding gap, omitted required credential, disguised seller earnout or concealed customer-loss cash deficit. A supported decline can earn full marks.