01
Define the problem before reading the accounts
Financial analysis begins with the purpose of the transaction, not with three statements. Is the buyer acquiring growth, capability, distribution, cash flow, control or time? Each objective requires different facts.
If the objective is unclear, precise restatement creates only an appearance of professionalism. The first output is to translate strategic assumptions into testable questions about revenue, cash conversion, reinvestment and downside ownership.
02
Statements are a language, not the enterprise
Accounting compresses complex operations into a common language. It improves communication while losing detail. Recognition timing, estimates, classification and management judgment can all shape the presentation.
Useful analysis moves among statements, audit reports, management accounts, budgets, contracts, operating data and interviews. Numbers point to contradictions and tests; they do not replace business understanding.
03
Move from historical results to future resilience
An acquisition buys uncertain future outcomes rather than a set of historical numbers. History is useful when it tests earnings durability, cash conversion, reinvestment and working-capital demands.
Not every historical difference deserves a perfect restatement. Priority belongs to differences that change future cash, risk distribution, funding needs or accountability.