These are the companion files of The Private Equity Operating Partner by Julian R. Sterling.The book on Amazon →
One Excel workbook that builds the artifact the book calls the most important one an operating partner produces. Around it, a blank version for your own deal, four working documents to print, forty questions that mark themselves, and three cases the book does not work. All free. Nothing is gated behind a sign-up, and no email address is asked for.
Six workbooks, the printable documents and the read-me. Each group below can also be
downloaded on its own. Last revised 22 September 2026.
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Chapter 13 is about building the value creation bridge, and it does not build one.
It gives the Vireo Health Services example three numbers — 6.2 million of gross
initiative impact, 14 million of entry EBITDA, 4.1 million of actual growth — and
says a reconciliation was built. It never shows it.
This workbook builds it. Vireo enters at 14.0 of EBITDA on 9.5×, levered 4.5×,
and exits five years later at 24.5 on 10.2× — 3.08× money,
25.3 per cent. The 145.73 of equity value created decomposes into six
buckets with a residual of zero to six decimal places, because a bridge
with a residual is not a bridge.
Then read the shape rather than the numbers. The operating work the whole book is about
is 41 per cent of the value created. Deleveraging
— which no operating partner performs — is 20 per cent,
almost as much. Another 14.5 per cent came from the market and the multiple,
which is to say from nothing anyone in the firm did.
The add-on number in your deck is wrong by 73 per cent
The 28.50 attributed to acquisitions is what a value creation deck prints. The add-ons were
bought for 12.0 of cash — cash that would otherwise have repaid debt,
which is why the deleveraging bucket is 28.83 and not roughly 41. Net contribution:
16.50. The difference between a buy-and-build programme that made
19.6 per cent of the value and one that made 11.3.
What the add-ons genuinely produced is multiple arbitrage: EBITDA bought at
4.0×, sold inside a platform trading at 10.2×. That is real, repeatable, and a
far stronger claim than an inflated gross figure — because it comes with a mechanism a
buyer can verify and continue.
The cross-term makes every bridge arguable
Enterprise value is EBITDA times a multiple. When both move, the change has three parts, and
the third — growth multiplied by re-rating, 7.35 here — belongs
to both and to neither. Assign it to growth and re-rating contributed 9.80. Assign it to the
multiple and re-rating contributed 17.15.
The growth bucket swings 7.4 per cent on that choice. The multiple bucket
swings 75. And the multiple bucket is precisely the one a buyer discounts, because
the next owner cannot repeat a re-rating. A seller has a direct incentive to starve it, and
nothing in the arithmetic stops them. Show the cross-term as its own line and let the
buyer allocate it — the credibility is worth more than the 7.35.
Leverage does the opposite of what everyone assumes
The belief is that heavy leverage dilutes the operating contribution. Run the same deal from
3.5× to 6.5× entry leverage and the operating share of value created
rises, from 39.7 to 44.1 per cent — because more debt means
more interest, less free cash flow, and a smaller deleveraging bucket. Leverage does not add
a bucket. It shrinks one.
And the figure that does not move at all: organic improvement contributes
59.85 at every leverage level, identical at 3.5× and at 6.5×,
because it is a property of the business and not of the balance sheet. Leverage does not
change what the operating work is worth — it changes the size of the equity base that
work is measured against.
What the eighteen-month gap actually cost
Four initiatives, 6.2 of gross impact. Two headwinds — caregiver wage inflation and a
licensing delay — worth −2.1. Net movement 4.1, which is the figure in the book.
Now price the gap. 2.1 of EBITDA at the entry multiple is 19.95 of enterprise value
— 28.5 per cent of the equity cheque. A board reading the gross
figure and believing EBITDA stood at 20.2 rather than 18.1 was wrong about the value of its
own investment by more than a quarter of what it put in. An unreconciled gross number is not
a reporting inconvenience; it is a mispricing of the fund's own position, carried quarter
after quarter until a buyer finds it.
The same bridge, for your own deal
The book’s model with every input emptied. Type in your own entry, hold and exit; the checks sheet counts what is still missing and tests that the bridge reconciles.
Chapter 13 and the appendix
A blank value creation bridge
Entry EBITDA, multiples, leverage, the EBITDA path by source, the add-on and the eighteen-month reconciliation: every amber cell is empty. The file runs a five-year hold, one row per year, and ends on a checks sheet: how many inputs are still missing, then six tests, starting with the only one that matters, a residual of zero.
The Vireo inputs are listed in a text file inside the archive. Type them back in and the file returns 70.0 in, 215.7 out and a bridge of 145.73, exactly as the appendix does.
Four pages to print and take into a meeting. A4, with margins wide enough for US Letter.
Appendices B, C and D · Chapters 5 and 13
Four working documents
The first hundred days of Appendix B, phase by phase, with owners and evidence. The value creation plan of Appendix C: the initiative inventory, the gross-to-net reconciliation the Vireo board needed at eighteen months, and a risk register. A board dashboard with the six-bucket bridge, the cross-term on its own line. And the twenty practitioner questions of Appendix D, with what to listen for.
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
Six on the role and the return model, nine on plans and levers, six on buy-and-build, the board and exit, eleven on the Vireo bridge and eight 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 in passing 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.
Chapter 8 · Case one
The price rise and the customers it loses
A blanket 4 per cent increase against Tanner’s method: the underpriced quartile moved halfway to its band median. On the plan the blanket increase wins, 1.96 against 1.32 of EBITDA. But each extra point of lost volume costs it 0.34 against 0.09, and if churn runs 2.6 points above the estimate, the segmented plan is ahead. The chapter’s warning, priced.
Chapter 13 · Case two
The run-rate the buyer will not pay for
Vireo exits with 2.0 of run-rate EBITDA the P&L does not yet show. The deck prices it at 20.4; a buyer crediting 40 per cent pays 8.2, and the seller loses 12.2 of equity. Holding a sixth year adds 37.9 of equity and lowers the IRR from 26.2 to 24.6 per cent. Which is better depends on which number the fund is paid on.
Chapter 8 and the appendix · Case three
The cash that lands in someone else’s bucket
Receivable days cut from 75 to 60 release 5.9 in year 2 and add 8.49 of exit equity, without moving EBITDA. The appendix bridge files all of it under deleveraging, the bucket it says no operating partner performs: 22.7 per cent of that bucket is now operating work. If the days drift back before exit, the gain falls to 1.30.
Every company and figure is illustrative, as everything in the book is. What is not
illustrative is the shape of the result, which holds for any plausible set of inputs. One of
the thirty-two controls tests that the bridge's residual is zero — because a bridge
with a residual is not a bridge.
Opening the file
The workbook opens in Microsoft Excel, LibreOffice Calc, Google Sheets and Numbers. It uses
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
22 Sep 2026
A blank version of the bridge, four working documents, forty questions that mark themselves and three new cases. The book’s workbook can now also be downloaded on its own; its content has not changed.
How much cash does reducing DSO release?Revenue over 365 times the days cut: 15 days on 129.6 million releases 5.33 million once and adds 8.51 million of exit equity, not 53.3 at the multiple.
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.
Mergers and AcquisitionsThe board paper says the deal creates 13,436,667 of value. The arithmetic says it destroys 17,530,855. Nobody is lying.
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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