Forensic
Forensic Analysis
Screen accounting and cash-flow patterns that may warrant further diligence.
Illustrative data for a fictional company — see Methodology.
Cash Conversion
CFO / Net Income — is reported profit backed by cash?
The recent decline coincides with a working-capital build — see below.
Working Capital
DSO, DIO, DPO, and the resulting Cash Conversion Cycle.
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| DSO (Days Sales Outstanding) | 45 days | 45 days | 45 days | 45 days | 45 days |
| DIO (Days Inventory Outstanding) | 0 days | 0 days | 0 days | 0 days | 0 days |
| DPO (Days Payables Outstanding) | 40 days | 40 days | 40 days | 40 days | 40 days |
| Cash Conversion Cycle | 5 days | 5 days | 5 days | 5 days | 5 days |
DIO is 0 — inventory isn't a driver for this SaaS business.
Capex vs. D&A
Whether capital spending is running ahead of or behind depreciation.
Leverage
Total Debt / EBITDA and Net Debt / EBITDA over time.
Beneish M-Score
8-variable earnings-quality screen — a prompt for further diligence, not proof.
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
| DSRI (Receivables growth) | 0.999 | 1.000 | 0.996 | 1.006 |
| GMI (Gross margin index) | 1.000 | 1.000 | 1.000 | 1.000 |
| AQI (Asset quality index) | 0.893 | 0.886 | 0.840 | 0.792 |
| SGI (Sales growth index) | 1.179 | 1.131 | 1.179 | 1.153 |
| DEPI (Depreciation index) | 1.007 | 0.974 | 0.972 | 1.022 |
| SGAI (SG&A index) | 0.952 | 0.950 | 0.947 | 0.958 |
| TATA (Total accruals / assets) | -0.0204 | -0.0280 | -0.0287 | -0.0184 |
| LVGI (Leverage index) | 0.912 | 0.911 | 0.910 | 0.942 |
| M-Score | -2.42 | -2.51 | -2.49 | -2.48 |
Reference threshold: -1.78. See Methodology for the full formula.
Altman Z'-Score
Bankruptcy-risk screen (book-value variant — see Methodology).
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Working Capital / Total Assets | 7.1% | 11.8% | 16.6% | 22.1% | 27.3% |
| Retained Earnings / Total Assets | 33.2% | 36.9% | 41.3% | 46.9% | 53.9% |
| EBIT / Total Assets | 10.3% | 13.4% | 15.8% | 19.0% | 21.9% |
| Book Equity / Total Liabilities | 0.89x | 1.07x | 1.28x | 1.50x | 1.65x |
| Revenue / Total Assets | 0.81x | 0.88x | 0.92x | 0.99x | 1.04x |
| Z'-Score | 1.83 | 2.15 | 2.41 | 2.76 | 3.07 |
| Zone | Grey | Grey | Grey | Grey | Safe |
Management Commentary vs. Reported Metrics
Commentary checked against the trend it describes.
FY2022 · Illustrative FY2022 Shareholder Letter
“We drove meaningful margin expansion this year while sustaining strong top-line growth, and our cash conversion remained healthy.”
Claim checked: EBITDA margin expanded year-over-year
EBITDA margin moved from 18.0% to 20.0% (+2.0pp).
FY2022 · Illustrative FY2022 Shareholder Letter
“We drove meaningful margin expansion this year while sustaining strong top-line growth, and our cash conversion remained healthy.”
Claim checked: Revenue growth exceeded 10% for the year
Revenue growth was 17.9%, above the 10% reference threshold used here.
FY2022 · Illustrative FY2022 Shareholder Letter
“We drove meaningful margin expansion this year while sustaining strong top-line growth, and our cash conversion remained healthy.”
Claim checked: Cash conversion (CFO / Net Income) was healthy and stable
CFO / Net Income was 1.23x versus 1.18x in the prior year.
FY2023 · Illustrative FY2023 Shareholder Letter
“EBITDA margin expanded again in FY2023 as the business continued to scale efficiently, and free cash flow generation remains a core strength of the model.”
Claim checked: EBITDA margin expanded year-over-year
EBITDA margin moved from 20.0% to 22.0% (+2.0pp).
FY2023 · Illustrative FY2023 Shareholder Letter
“EBITDA margin expanded again in FY2023 as the business continued to scale efficiently, and free cash flow generation remains a core strength of the model.”
Claim checked: Cash conversion (CFO / Net Income) was healthy and stable
CFO / Net Income was 1.26x versus 1.23x in the prior year.
FY2024 · Illustrative FY2024 Shareholder Letter
“Revenue growth accelerated and margins expanded further, reflecting durable operating leverage across the platform.”
Claim checked: Revenue growth accelerated versus the prior year
Growth moved from 13.1% to 17.9%.
FY2024 · Illustrative FY2024 Shareholder Letter
“Revenue growth accelerated and margins expanded further, reflecting durable operating leverage across the platform.”
Claim checked: EBITDA margin expanded year-over-year
EBITDA margin moved from 22.0% to 24.0% (+2.0pp).
FY2025 · Illustrative FY2025 Shareholder Letter
“We delivered another year of double-digit growth and margin expansion, with cash conversion consistent with prior years and no notable change in working-capital dynamics.”
Claim checked: Revenue growth exceeded 10% for the year
Revenue growth was 15.3%, above the 10% reference threshold used here.
FY2025 · Illustrative FY2025 Shareholder Letter
“We delivered another year of double-digit growth and margin expansion, with cash conversion consistent with prior years and no notable change in working-capital dynamics.”
Claim checked: EBITDA margin expanded year-over-year
EBITDA margin moved from 24.0% to 25.5% (+1.5pp).
FY2025 · Illustrative FY2025 Shareholder Letter
“We delivered another year of double-digit growth and margin expansion, with cash conversion consistent with prior years and no notable change in working-capital dynamics.”
Claim checked: Cash conversion (CFO / Net Income) was healthy and stable
CFO / Net Income remained above 1.0x at 1.12x but declined from 1.22x in the prior year.
FY2025 · Illustrative FY2025 Shareholder Letter
“We delivered another year of double-digit growth and margin expansion, with cash conversion consistent with prior years and no notable change in working-capital dynamics.”
Claim checked: Working capital grew roughly in line with revenue
Net working capital grew 34.5%, materially faster than revenue growth of 15.3%.