Afrexai Financial Due Diligence

# Financial Due Diligence Analyzer

Run comprehensive financial due diligence on acquisition targets, investment opportunities, or partnership prospects. Built for PE firms, corporate development teams, and founders evaluating deals.

## What This Does

Generates a complete due diligence package:
- **Quality of Earnings (QoE)** — normalize EBITDA, strip one-time items, identify recurring vs non-recurring revenue
- **Working Capital Analysis** — NWC trends, peg calculation, seasonal adjustments
- **Revenue Quality** — customer concentration, churn, cohort analysis, contract backlog
- **Debt & Liabilities** — hidden obligations, off-balance-sheet items, contingent liabilities
- **Cash Flow Bridge** — EBITDA to free cash flow conversion, capex requirements
- **Red Flag Scanner** — 23 common deal-killers ranked by severity

## How to Use

Tell your agent: "Run financial due diligence on [company/deal]"

Provide what you have:
- Financial statements (P&L, balance sheet, cash flow) — even partial
- Revenue breakdown by customer/product
- Known deal terms (purchase price, structure)

The agent will generate a structured diligence report with findings, risks, and negotiation points.

## QoE Framework

### EBITDA Normalization Checklist
| Adjustment Category | Common Items | Direction |
|---|---|---|
| Owner compensation | Above/below market salary, personal expenses | +/- |
| One-time revenue | PPP loans, insurance claims, litigation settlements | - |
| One-time expenses | Restructuring, M&A costs, natural disaster | + |
| Related party | Above/below market rent, intercompany charges | +/- |
| Accounting changes | Revenue recognition timing, reserve adjustments | +/- |
| Run-rate adjustments | New contracts, lost customers, price changes | +/- |

### Revenue Quality Score (0-100)
| Factor | Weight | Scoring |
|---|---|---|
| Recurring vs one-time | 25% | >80% recurring = 25, >60% = 18, >40% = 12, <40% = 5 |
| Customer concentration | 20% | Top customer <10% = 20, <20% = 15,...

# Financial Due Diligence Analyzer

Run M&A-grade financial due diligence on any target. Quality of Earnings, working capital analysis, revenue quality scoring, red flag detection, and valuation sanity checks.

**Who this is for:** PE firms, corporate development teams, search fund operators, founders evaluating acquisitions or partnerships.

## Features

- **Quality of Earnings (QoE)** — EBITDA normalization with 6-category adjustment framework
- **Revenue Quality Score** — 0-100 composite score across 6 factors (recurring %, concentration, retention, backlog, growth, pricing power)
- **Working Capital Peg** — NWC calculation with seasonal normalization
- **Red Flag Scanner** — 23-point checklist ranked Critical / Serious / Notable
- **Valuation Multiples** — 2025-2026 benchmarks across 7 sectors
- **Cash Flow Bridge** — EBITDA to FCF conversion analysis

## Usage

```
Tell your AI agent: "Run financial due diligence on [company]"
```

Provide financials (even partial) and the agent generates a structured diligence package.

## Links

- [AI Context Packs](https://afrexai-cto.github.io/context-packs/) — 10 industry packs, $47 each
- [Revenue Leak Calculator](https://afrexai-cto.github.io/ai-revenue-calculator/)
- [Agent Setup Wizard](https://afrexai-cto.github.io/agent-setup/)

Built by [AfrexAI](https://afrexai-cto.github.io/context-packs/).