Chapter 13 - The Complete Reference

G2G Chapter 13 - The Complete Reference From Greenhorn to Gold(wo)man - Complete Reference

The Complete Reference

Every formula. Every definition. Every framework. One document. CHAPTER 13 OF 13 - APPENDIX Cram Sheet - Coming Soon Available on launch day About This Document

The One Source of Truth

Chapters 1 through 12 told the story. Characters, drama, tension, narrative arc. They made finance memorable. This document strips all of that away. No narrative. No characters. No plots. Pure technical content - every concept, formula, framework, and definition from the entire G2G series, compressed for revision, exams, and interview preparation. 16 Sections 120+ Glossary Terms 60+ Formulas 80+ Acronyms 8 pages of pure reference material. Print it. Highlight it. Memorise it. Section 0 Quick Reference

Fund Economics & GP/LP Structure

The Basic Deal: LPs (limited partners) invest capital into a blind pool. GPs (general partners) manage the fund, make investment decisions, and share in profits. Capital calls: LPs commit capital; GP draws it down as needed Management fee: 2% of committed capital (Years 1–5), 2% of invested (Years 6–10) Carried interest: GP keeps 20% of profits after hurdle Hurdle rate: 8% preferred return to LPs before carry begins Blind pool: LPs don't know which companies before investing Carry Waterfall Formula Carry = 20% × (Total Distributions − Capital Called − Preferred Return) Return Metrics DPI = Distributions Paid / Capital Invested RVPI = Remaining Value / Capital Invested TVPI = (DPI + RVPI) - Total Value to Paid-In Capital J-Curve: Fund returns are negative in years 1–3 (management fees drag), then climb as exits happen. Total TVPI should reach 1.5x–2.5x by exit. Sections I–II Quick Reference

Income Statement & Cost Structure

Income Statement Cascade Revenue − COGS (Cost of Goods Sold) = Gross Profit − OpEx (Selling, General, Admin) = EBITDA (Earnings Before Interest, Taxes, D&A) − D&A (Depreciation & Amortisation) = EBIT (Operating Profit) − Interest Expense − Taxes = Net Income Key Margin Formulas Gross Margin % = (Revenue − COGS) / Revenue EBITDA Margin % = EBITDA / Revenue EBIT Margin % = EBIT / Revenue Net Margin % = Net Income / Revenue Breakeven & Operating Leverage Breakeven Units = Fixed Costs / (Price − Variable Cost per Unit) Contribution Margin = (Revenue − Variable Costs) / Revenue DOL = % Change in EBIT / % Change in Revenue Real example: Königshof (manufacturing) EBITDA margin ~22%. Subtrax (SaaS) EBITDA margin ~35%. Manufacturing has higher fixed costs; SaaS has higher variable costs but bigger operating leverage once scaled. Sections III–IV Quick Reference