Deal advisory: applied workshop

Deal purpose and diligence scope

Use deal purpose and diligence scope to make decisions inspectable.

Separate commercial, financial and legal diligence questions.

Teaching example: Financial diligence does not replace legal advice.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Quality of earnings

Use quality of earnings to make decisions inspectable.

Compare earnings, cash and management adjustments.

Teaching example: An unusual item needs contextual evidence before adjustment.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Adjustment bridges

Use adjustment bridges to make decisions inspectable.

Bridge reported to explicitly defined adjusted earnings.

Teaching example: 100 plus one-off cost 10 gives 110, without counting it twice.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Working capital and seasonality

Use working capital and seasonality to make decisions inspectable.

Compare monthly receivables, inventory and payables.

Teaching example: A year-end balance may miss seasonal needs.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Debt and cash scope

Use debt and cash scope to make decisions inspectable.

List debt, cash and unresolved items in a fictional deal.

Teaching example: An EV-to-equity bridge needs defined debt and cash.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Management questions

Use management questions to make decisions inspectable.

Turn each exception into an evidence request or question.

Teaching example: A margin jump prompts questions about price, cost, mix and accounting.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Deal findings and limitations

Use deal findings and limitations to make decisions inspectable.

Write a one-page findings memo with evidence strength and open issues.

Teaching example: Separate observed facts from possible valuation implications.. Predict the result, independently check the key step, and compare these assumptions with the actual role. Do not use demonstration results as real-world advice.

Worked example · fictional

From a problem to inspectable work

Synthetic deal: reported earnings 100; proposed one-off addbacks 15 include recurring maintenance 5; the remaining 10 is verified nonrecurring.

1. Add only supported nonrecurring 10: 100+10 = 110. A seller's label does not make maintenance nonrecurring.
2. Further judgment: The seller labels all costs nonrecurring.
3. Inspect contracts, historical recurrence and ongoing operational need

Deliver earnings quality and working-capital brief: the calculation reference is 110; the recommendation must respect Inspect contracts, historical recurrence and ongoing operational need. Separate numbers, inference and unknowns.

Failure case and repair

In Working capital and seasonality, copy tool output without definitions, then retain the conclusion when asked: The seller labels all costs nonrecurring.

Even a result of 110 does not explain when Inspect contracts, historical recurrence and ongoing operational need is supported.

Add only supported nonrecurring 10: 100+10 = 110. A seller's label does not make maintenance nonrecurring. Then test assumptions in Management questions.