A Practitioner’s Guide to the Seven Prices of One Deal, and Which of Them Is True
Julian R. Sterling
These are the companion files of Mergers and Acquisitions by Julian R. Sterling.The book on Amazon →
The four Excel workbooks that go with the book, recalculated by an independent model and given fifteen new
checks for sentences of the book that the arithmetic does not support. Around them: the same four models with the
inputs emptied, for your own deal; thirteen working documents to print; forty questions that mark themselves; and
three cases the book names and never takes to a number. Every figure is a live formula, and each workbook ends
with a Checks sheet: 159 controls in all, every one green.
Free to download. No sign-up, no email address, nothing to fill in.
Twelve workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 24 September 2026.
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These carry the book’s own figures, so that every number it prints can be traced to a live
formula. Each closes on a checks sheet that ends ALL OK.
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Chapters 1 to 4
Seven prices, and the three that are one number
The same acquisition quoted seven ways, as live rows. Three of them print
9.0000 times EBITDA and not by coincidence: taking net debt out of the
numerator and putting it back in the denominator leaves the multiple where it was. The sheet
shows the algebra, then the two multiples that are genuinely different — 9.0000 and
9.3496 — and the hybrid at the full earn-out, 9.9058, which divides the
outlay of a world in which the target outperformed by the EBITDA of a world in which it has
not yet.
Beside them sit the four debt-like items with their three qualifications as
switches: already on the balance sheet, bears interest afterwards, counts in the
lender's covenant. Put the leases back into the covenant and into the interest charge —
the combination that looks rigorous and bills the rent twice — and the headline goes from
minus 15.7134 to minus 19.8485 per cent.
Five years of the combined income statement with the synergy ramp, the cost to achieve, the
transaction fees, the intangible amortisation and every interest line — printed under
all four conventions at the same time. Year one runs from
minus 15.7134 per cent statutory to plus 11.2171 on the cash
convention that half the market uses, on the same deal and the same accounts.
Then the funding and the 7.9228 per cent dilution; the allocation of the price with the
deferred tax liability that IFRS 3 requires on the intangibles and that the income statement
quietly assumes; the twelve-line bridge from standalone to combined earnings
per share, which closes to zero; and the eight charges the deal creates, ranked, beside the one
it did not create. Revised: eight new checks correct the book where its sentences outrun its
figures. The annual amortisation, 7,135,517, is 64,483 below the synergy run rate, not above
it; the dilution is the fourth charge, not the third; and taking the cash out at completion as the
consideration would be wrong by 2,749,087, not 6,900,000.
The earn-out at fair value, discounted at the cost of debt rather than the cost of capital
because the probability has already removed the risk. The target on a discounted cash flow,
and the 31.7236 per cent premium that follows. The synergy ramp and the
9,400,000 bill to achieve it, which is 1.3056 times the run rate and which the board paper
leaves out.
Then the four-line value calculation, minus 17,530,855, set beside the board's
plus 13,436,667 and reconciled item by item to the 30,967,522 that separates
them — no error on either side, four conventions. The break-even run rate at both
integration budgets, 1.2698 and 1.2979 times what was announced. And the cost of capital
against growth grid in both forms, twenty-five cells each. Revised: seven new checks, among them
the two thresholds the grid implies and the book misstated. Value created is nil at 8.77 per cent,
half a point below 9.25, not a full point; at 9.25 per cent the deal turns positive once growth
passes 2.22 per cent, not 2.50.
The margin ladder, the leverage and the earn-out's fair value are three quantities that each
depend on the other two. The sheet solves the fixed point in the open, over eight passes you
can watch — and then walks into the band, 508,424 wide and beginning
exactly at the covenant rung, where the ladder admits no solution at all: at
the low rate the leverage crosses, at the high rate the earn-out is worth less and it falls
back below. The width has a closed form, and it is the same 203,370 that moves the value
created.
Then the target's net debt as a live input, with the accretion decomposed into the three
columns that sum exactly: the debt-versus-equity arbitrage everybody cites is worth
0.0338 of a point, the accounting effect sixteen times that, and the step at
the rung 3.8376 points for 40,000 of net debt.
The four workbooks with every input emptied. The checks sheets count what is still missing and test what holds for any inputs.
Chapters 1 to 17
Your target, your price, your lender’s ladder
The seven prices, the combined accounts, the value created and the ladder, with the same formulas and the sixty inputs emptied: the two companies, the price and funding, the earn-out, the synergy ramp and bill, the valuation and allocation, the debt-like items with their three yes-or-no answers, and the margin ladder of your own credit agreement. The axes of the sensitivity grid and of the leverage table stay.
The book’s inputs are listed in a text file inside the archive. Type them back in and the book’s figures come back with them: 5.25 per cent at 2.9694 times, minus 15.7134 per cent in year one, minus 17,530,855 of value created.
Thirteen pages to print and use. A4, with margins wide enough for US Letter.
Chapters 1 to 18
Thirteen working documents
Which of the seven prices the paper quotes. The debt-like items, qualified three times. The framework test: where the expense sits before any lease enters a covenant. The earn-out’s four numbers and three places. What the business is worth without you. The synergy slide and its coefficient. The run rate the deal needs, in revenue points. The value bridge in five lines. The funding slide and its three perimeters. The ladder, the fixed point and the band. The allocation of the price. The four columns and the year-one bridge, line by line. And the seven questions for Thursday.
A workbook that marks itself. Answer in the yellow cells; the marking fills in as you go.
All parts of the book
Forty questions on the book
Seven on the prices and the debt-like items, seven on the earn-out, the intrinsic value and the synergies, seven on value created and the funding, seven on the allocation and the earnings, six on the sensitivity and the target’s leverage, and six on the three cases below. Numbers are marked to a tolerance, multiple choice to the letter, and the score sheet counts your errors part by part: that is your revision list.
Nothing is hidden. The marking sheet holds every answer, every tolerance, and the reason for each answer.
New material, not a restatement. Three situations the chapters name and never take to a number. Each case is one workbook: the note is the first sheet, the model is the rest, and a checks sheet closes it. Type your own figures in and every finding recomputes.
Chapters 3, 4, 11 and 12 · Case one
Balmacara under IFRS 16, both sides of the ratio
Chapter 4 says a change of framework moves four things at once and never runs it. With the lease given six years to run (ADDED), the rent leaves EBITDA and the same price is 8.7390 times, not nine; leverage rises to 2.9831 and stays under the rung; the band where the ladder has no solution widens from 508,424 to 751,634, because the lease liability falls with the rate too. Year one prints minus 15.5874 per cent, next to the book’s minus 15.7134 and far from the punitive minus 19.8485: most of the difference is the right-of-use asset the book’s allocation leaves out.
Chapters 7, 8 and 16 · Case two
The same promise, two years later
The coefficient under the three changes chapter 7 names and never computes. A five-year ramp (ADDED) takes it from 9.0241 to 8.1746 and costs 6,116,940 of value, all of it through the synergies; break-even needs 1.4018 times the announcement. A 12 per cent cost of capital costs 68,877,803, of which 50,593,740 is the same rate revaluing the target, and would need 11.19 per cent of revenue in savings. Zero growth sits between the two.
Chapters 10 and 15 · Case three
The target’s own rate
Chapter 15 cannot split the 0.011829 of assumed interest because “the book does not know that rate”. On the acquirer’s own ladder the target, at 1.39 times, pays 5.00 per cent: the deal created 96,250 a year of it, 0.1350 of a point, against the 2.8342 a paper gains by removing the whole line. Above 6.46 per cent standalone (a private-company premium, ADDED at 150 basis points, would put it at 6.50), refinancing the target saves more than the acquirer’s own repricing costs.
an input cell; everything else on the sheet is a formula
Black text
a formula — do not overtype these
Checks sheet
the printed figure beside the computed one, with a PASS or a FAIL; the sheet ends ALL OK
ADDED
a figure the book does not give, used in the cases and marked wherever it appears
Why the checks matter more than the models
A workbook that agrees with a book proves nothing on its own — the author wrote both. What
the Checks sheets do is different: they force the model to reproduce, from a formula, a number
that was printed before the model existed.
On this book the discipline worked in the other direction repeatedly. The reference model went
through eight adversarial audit passes and carries a journal of
sixty corrections at the end of its source. Four of them reversed a conclusion
that had already been written on the page — including the one about the leases, where an
earlier version billed the rent twice and printed a headline of minus 19.8485 per cent because that
looked like the rigorous answer. One version was shipped with the proof of its own error printed in
its output file and unread, which is why the model now refuses to print at all if the year-one
bridge does not close, and refuses to print a sentence claiming a movement it does not compute.
The last two passes found no arithmetic error at all. What they found were sentences that were true
when they were written and false when they were read.
Go beyond the companion files
Mergers and Acquisitions develops the complete framework behind these models, with the assumptions, trade-offs and worked examples tied together.
The workbooks open in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers; the PDF
prints on A4 or US Letter. They use no macros and no add-ins, so nothing needs to be enabled or trusted. If your spreadsheet asks
to update links on opening, decline — there are none.
What changed, and when
24 Sep 2026
The four workbooks recalculated by an independent model: every computed figure is the book’s. Fifteen checks added where the book’s sentences outrun its figures: the amortisation is 64,483 below the synergy run rate, not above it; the dilution ranks fourth; the wrong consideration is off by 2,749,087, not 6,900,000; with the target’s profit first the bridge stands at 0.541432, not 0.505634; value created turns positive at 8.77 per cent, or at 2.22 per cent growth, not a full point lower or above 2.50. Two read-me texts corrected. Added: a blank set, thirteen working documents, forty questions that mark themselves, and three cases.
How do you calculate goodwill in an acquisition?Price less the fair value of net identifiable assets, after deferred tax on the step-ups: 150 million paid gives 66.5 million of goodwill, not 54.0.
How do you calculate the fair value of an earn-out?Weight each scenario's payment by its probability, then discount: a 9,000,000 earn-out cap is worth 3,203,987 at a 6.0 per cent cost of debt, 35.6 per cent.
How do you calculate the ROIC of an acquisition?NOPAT of the target plus synergies, over price plus fees plus the after-tax cost to achieve: 9.08 per cent in year 3 on 189,750,000, against an 8.5 per cent WACC.
How do you calculate a merger arbitrage spread?Offer less price plus dividends, over price: 50.00 against 47.50 with a 0.25 dividend is 5.79 per cent, 11.91 per cent annualised over six months.
Cash or stock: which should an acquirer pay with?Cash keeps all the synergy risk with the buyer, stock shares it. A 300 premium puts 7.50% of the acquirer's value at risk in cash and 5.66% in stock.
Closing the DealTwo defensible bridges 20.70 million apart, a peg worth 7.00 million, and the six choices that remove 6.60 of a 12.00 earn-out.
CMBS and CRE CLOsWhere the loss actually lands, from appraisal reduction to realised severity, and what the B-piece is really being paid for.
How to Read a Commercial LeaseThe three refinements chapter 19 names and never performs, and the renewal rate below which the mark-to-market is worth nothing.
How to Read a Credit AgreementWhere the default actually comes from, the cure that costs 5.5 times the other, and the capacity nobody adds up.
How to Read a Real Estate Loan AgreementThe cure ratio in closed form, the four-point window in which the cheap cure works, and the cure sized to the wrong threshold.
Office Real EstateA six per cent yield that returns 3.2 per cent once the re-letting cycle is paid for, and the headline-to-net-effective rent arithmetic.
Private Equity Real EstateBoth worked waterfalls to the dollar, the two capital stacks, and the arithmetic of the promote made changeable.
Private Markets PerformanceThirty-one of the thirty-three figures chapter 19 publishes reproduce exactly — and the two that do not are named rather than quietly adopted.
Raising a Real Estate FundThe chapter 17 funnel run on a calendar — when the first close actually lands, and why more travel does not help.
Real Estate FinanceFour people look at one building and reach four numbers; the lender is whole only above 105,109,489, twelve per cent below today’s value rather than forty.
Real Estate Financial ModelingProperty, development and fund models built line by line, and the modelling test worked end to end.
Real Estate Fund ManagementThe waterfall of 6.11, the build-to-core of 8.7 and the proceeds gap, reproduced as live formulas rather than asserted.
REIT Analysis and ValuationFFO of 532.0, AFFO of 381.0, net asset value and dividend safety — every figure a formula you can change.
Retail Real EstateThe occupancy cost of every unit in a centre, the sixteen per cent of the rent roll no tenant can sustain, and the right-size-convert-or-hold decision priced.
Sale and LeasebackA €179.5 million transaction end to end, with rent cover measured on the entity that actually signs the lease.
Self-Storage Real EstateThe cohort engine behind a 590-unit store, and the rate increase on existing customers priced against the move-outs it causes.
The Fund Finance ProfessionalChapter 8 builds the reported-to-eligible NAV bridge; chapter 9 computes every ratio without it. Two points at every state — and what a subscription line does to the IRR.
The Growth Equity InvestorWhat a pro rata cheque really costs, and the band where defending your ownership loses money.
The Private Credit InvestorThe two coverage ratios are not measured on the same thing: the erosion is 47.7 per cent, not the 28.7 the headline implies.
The Private Equity Fund Controller PlaybookThe book defines IRR, DPI, RVPI and TVPI, tells you to update them at the exit, and prints not one value. Computed: a 1.833× deal inside a fund at 0.892 TVPI.
The Venture Capital AssociateWhat defending a position costs, and how many companies a reserve pool actually defends.
Financial Risk ManagementA fund inside every limit that cannot meet a redemption — and the number that decides it is the one with no currency attached.
Business ValuationThree advisers land 26.8 per cent apart on one company, and the whole gap turns out to be 1.96 points of perpetual growth.
Quantitative FinanceThree models agree to a quarter of one per cent about a number that one unobservable input moves a hundred and three times as much.
Asset ManagementFour people quote four returns for one mandate, all correct and 2.7017 points apart — forty-eight times the manager’s net skill.
Alternative InvestmentsA manager reports 13.29 per cent and the endowment earns 6.26 — both correct, and only a third of the advertised advantage arrives.
Credit AnalysisFour defensible EBITDAs on one borrower give leverage from 3.19x to 6.47x — and the add-back argument is fifty times the covenant headroom.
Venture CapitalOne company out of twenty-eight returns 56.7 per cent of the fund, and half the capital goes in after the decision — at half the return.
Machine Learning for FinanceFive people quote the accuracy of one credit model, all five are right, and the number that decides how much money it makes is none of them.
Commercial Real Estate InvestingThe equity earned 8.6647 per cent and the investor received exactly 8.0000 — the preferred return, and nothing above it.
DerivativesThe treasury report says the hedge cost 1,233,698. That is the interest differential, not a cost.
Treasury ManagementFive cash balances for one company, all correct and 145,600,000 apart — and the revolver that is two-thirds of the liquidity leaves at a revenue fall of 8.4127 per cent.
Financial Planning and AnalysisRevenue 3.0190 per cent above budget and operating profit 16.3209 per cent below it, in the same quarter, with every figure correctly stated.
Energy TradingA position report that is 91.7031 per cent hedged and correctly computed, on a book that is short 2,542,000 MWh — and a margin call of 198,400,000 the next morning.
Construction Cost ControlA contract sum of 26,301,102 became a final account of 29,153,363 on the building that was drawn — and 85.8 per cent of what was lost was knowable on the day it was signed.
Trade FinanceSix routes to payment on one 4,200,000 export order cost between 178,040 and 223,268, a spread worth 14.8 per cent of the margin, and a day of buyer credit costs 1,031.76.
Cost AccountingOne factory costed twice on the same 13,440,000 of overhead, and 4,053,091 moves between four product families.
Pricing StrategyA list price of 148.00, a pocket price of 112.51, and the nine deductions in between — with what one point of price is actually worth.
Contract ManagementA bid 5.50 a unit cheaper, signed on paper worth 9.81 a unit more — and 94.68 per cent of it was knowable on the day of signature.
Capital MarketsFour defensible readings of one bond, the cost of an issue under each convention, and the placement discount computed at a constant discount.
Financial RegulationThree ratios pass and the fourth is in breach by 1,956.0 million: the output floor, the liquidity buffer after encumbrance, and the loan split.
Bank ManagementFour defensible readings of one balance sheet, the deposit beta measured two ways, and the liquidity that lasts 3.9 days.
The Real Estate WorkoutFour ways out of one broken loan, discounted to today, and the 58.7 cents at which a payoff beats enforcement.
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