Financial diligence dashboard

Financial Diligence Dashboard

Two deliverables, one workflow: a defensible read of the numbers, and a shareable artifact that carries it.

The analysis half is worthless if the artifact misrepresents it, and the artifact is worthless if it breaks when the recipient opens it. Most of the failure modes below come from treating these as separate jobs.

Workflow

1. Extract and pin down the periods. Before anything else, work out what fiscal period the data actually covers (see Period labeling — this is the single most common error).
2. Compute the ratio pack using one stated convention (see Ratio conventions).
3. Separate reported from adjusted. Identify non-operating and non-recurring items and show both figures (see Reported vs adjusted).
4. Raise quality-of-earnings flags with the figures behind each one.
5. Build the dashboard from assets/template.html (see references/dashboard-build.md before writing any HTML).
6. State the provenance of anything computed or estimated when presenting.

Period labeling

Getting the quarter wrong invalidates every comparison on the page, and it is easy to do because filings rarely print "Q3" anywhere.

Derive it rather than assuming:

• Find the fiscal year end in the accounting-policies note. It is frequently not December — retailers, semiconductor firms, and many tech companies use offbeat year ends.
• Count forward from that year end to place the period. A quarter ending in April belongs to Q1 of a fiscal year that ends the following January.
• Watch for 52/53-week years and 14-week quarters. These break naive year-over-year comparisons and the filing usually says so explicitly.
• The comparative column is the prior fiscal period, which may not be twelve calendar months earlier.

State the derived label with its basis: "Q1 FY2027 (three months ended Apr 26, 2026; fiscal year ends last Sunday in January)."

Ratio conventions

Pick one convention, apply it everywhere, and state it on the artifact. Mixing conventions across a document — annualized in the prose, quarterly on the cards — produces two different numbers for the same metric and destroys trust in the whole thing.

Compute at minimum:

• Profitability: gross margin, operating margin, net margin (reported and adjusted), ROE, ROIC
• Liquidity and solvency: current ratio, quick ratio, net debt or net cash, net debt/EBITDA, interest coverage
• Efficiency: DSO, DIO, DPO, cash conversion cycle, asset turnover
• Cash quality: operating cash flow to net income, free cash flow conversion

For working-capital days from a single quarter, either use days-in-quarter against quarterly revenue and COGS, or annualize both sides — never mix. Quarter-end balances are point-in-time and can be distorted by seasonality or a large shipment landing near the close; note this where a figure moves sharply.

Reported vs adjusted

Headline margins are frequently carried by items with nothing to do with operations: unrealized marks on equity or investment portfolios, litigation settlements, disposal gains, tax items, one-time impairments.

Always compute both and show both. The pairing is the insight — a card reading "Net margin 71.5% (incl. $15.9B of investment gains)" next to "Adj. net margin 51.9%" tells the reader what the business earns, which a single number cannot.

Do not silently substitute the adjusted figure for the reported one. Show the reported figure, show the adjustment, show the result. Anyone using the analysis for a valuation needs to see the bridge.

Quality-of-earnings flags

Rate each HIGH / MEDIUM / LOW and attach the underlying figures. Look for:

• Non-operating or non-recurring income carrying reported earnings
• Unrealized marks on illiquid or non-marketable holdings, especially large moves in a single period
• Receivables growing faster than revenue, or lengthening DSO
• Inventory building faster than revenue — either pre-positioning for demand or channel buildup, and the filing rarely distinguishes them
• Operating expense lines held flat against fast revenue growth (flattering but not durable)
• Widening or narrowing gap between net income and operating cash flow
• Capitalized costs that were previously expensed, or changed accounting estimates
• Customer, segment, or geographic concentration

A flag is not an accusation. Write each one as a question a diligence team would need to answer, with the number that raises it.

Building the dashboard

Read references/dashboard-build.md before writing HTML. It contains the design tokens, the type scale, and the constraints that make the file survive being shared — in particular the self-contained rule, which is the difference between a dashboard that renders correctly for the recipient and one that arrives broken.

Start from assets/template.html rather than writing from scratch. It has the metric row, tabbed sections, period toggles, ratio cards, flag list, and cash-flow bridge already wired.

Presenting the result

Lead with the finding, not the file. One or two sentences on what the numbers say, then the artifact.

Name explicitly:

• Which figures are reported (taken from the statements)
• Which are computed (and under what convention)
• Which are estimated (and on what basis)

Never present an estimate as a reported fact. If a figure needed an assumption — an annualization, a segment split, an EBITDA proxy — say which assumption.

Close with the questions the analysis cannot answer from the statements alone: demand durability, the nature of a one-off item, concentration risk, whether an inventory build is strategic. These are usually the most useful part of the output.

Example prompts

• "Here's their latest 10-Q — give me the key ratios and any red flags."
• "Run a quality-of-earnings screen on this and show me where cash and profit diverge."
• "Turn these financials into a dashboard I can send to the investment committee."
• "Make the background dark and keep everything else the same."