Example
Project Saguaro: what DealBasis caught
A fictional commercial HVAC contractor in Mesa, Arizona, and the built-in sample deal.
The EBITDA walk
Management's figure to the figure diligence supports
Management's Adjusted EBITDA$1,942,000
Bridge doesn't add up (CIM p.5)−$18,000
Consulting fees with no ledger support−$38,000
Price increase not yet earned−$145,000
Savings from software deploying in 2027−$60,000
Employee Retention Credit is income−$84,000
Rent, non-operating income and cut-off, from the ledger−$246,849
Diligence-adjusted EBITDA$1,350,151
Bars run from $1.2M to $2.0M.
$592Kless EBITDA than management presents
$3.55Mless enterprise value at the 6.0x multiple
High
Debt that isn't on the balance sheet
The owner's answers mention a $150,000 shareholder note. No balance sheet line carries it, and the lender confirmations list the same balance.
Management Responses.docx, section 4High
Revenue booked, then reversed
Two invoices dated in the last three days of August were reversed after period end, overstating revenue by $96,000.
General Ledger.csv, row 4157High
Payments just under the approval limit
24 entries between $4,750 and $5,000, eleven of them with one supplier.
General Ledger.csv, row 907 and 23 moreHigh
Receivables outpacing revenue
Receivables grew 44.6% in a year while revenue grew 14.5%, and days to collect rose from 42 to 51.
Balance Sheet and Debt.xlsx22/100
Not ready for an LOI
13 high-severity findings across six risk areas. All 139 citations re-read before any finding was shown.