Diligence Databooks and Reports

Overview

A diligence databook is the analytical backbone of a due diligence process. It brings the historical financial information into a single, reconciled workbook that shows trading, working capital, net debt, cash flow and key performance indicators across the review period, with every figure traceable to its source.

The report built on top of it turns the analysis into conclusions that decision-makers can use. We produce databooks and reports for each side of a transaction, either as part of a wider due diligence engagement or as a stand-alone service for advisers who need extra capacity or a specialist finish.

What the service covers

A databook and report package is built around the information the transaction needs, and commonly includes:

• Monthly and annual income statements, balance sheets and cash flow statements, reconciled to the accounting records and financial statements.
• Revenue and margin analysis by customer, product, geography or business unit.
• Adjusted EBITDA analysis, with a bridge from reported results.
• Net working capital and net debt schedules with supporting detail.
• Headcount, payroll and operating cost analysis.
• Capital expenditure and fixed asset analysis.
• Key performance indicators and their definitions.
• Commentary, charts and an executive summary written for the intended readers.

Key activities and deliverables

Key activities

• Agree the structure, period, level of detail and presentation conventions at the start.
• Collect and map the trial balance and sub-ledger data into a consistent chart of accounts for analysis.
• Build the workbook with built-in checks, reconciliations to source and clear labelling.
• Analyse movements, investigate anomalies and prepare the narrative.
• Update the databook for new trading months or revised information as the transaction progresses.
• Review the report for accuracy, consistency between the narrative and the numbers, and clarity of presentation.

Deliverables

• A reconciled financial databook in an agreed format, suitable for data room access where appropriate.
• A written due diligence report with executive summary, findings and supporting schedules.
• A reconciliation to statutory or audited accounts and the general ledger.
• Updates for later trading periods and clarifications for lenders or bidders.
• Where agreed, a version of the databook that can feed the lender's or investor's own model.

Our approach and methodology

We design databooks to be used, not just read. A consistent structure, formulae that can be followed and checks that flag any break in the reconciliation allow other advisers to rely on the workbook and to extend it for their own questions.

Reports are written for the reader. An investment committee needs the conclusions and the key judgements. A lender needs cash flow and covenant-relevant measures. A bidder needs a consistent factual record. We tailor the emphasis accordingly, keep narrative and numbers aligned, and set out the basis of preparation and limitations so that nobody has to guess what the work does and does not cover.

Benefits for clients

• One reconciled set of numbers that every party in the process works from.
• Faster responses to questions from investors, lenders and bidders.
• Reduced risk of errors caused by multiple versions of the same data.
• Clear, consistent presentation that supports confident decision-making.
• Capacity and technical support for advisory teams during busy deal periods.

Who needs this service

Our databook and report support is used by:

• Buyers, sellers and investors running a due diligence process.
• Corporate finance and accounting firms that need additional analytical resource.
• Lenders and credit teams that need clear financial analysis to support a credit decision.
• Management teams updating a databook during an extended or repeated sale process.
• Companies preparing a standing data pack for investors or refinancing discussions.

Scope and limitations

Our work is advisory. It is not an audit or a review under auditing standards and does not provide assurance on the financial information. We rely on the information and explanations management provides, and we state the basis of preparation and any limitations in our report.