Data-room classification + framework-aware DD verdicts — financial due diligence in 2 minutes vs 60-90 hours.
A typical mid-market financial due diligence data room contains 200–800 PDFs and Excel files spanning audited financials, debt schedules, AR/AP aging, cap tables, tax returns, and management MIS. Four bottlenecks consume 60–90 associate hours per engagement before any judgement is applied.
Associates manually triage a 500-file data room across 10 diligence document types — statutory audits, tax returns, AR / AP aging, debt schedules, MSA/SOWs, cap tables — before any QoE analysis begins. The triage alone consumes the first week of the engagement.
The cap-table fully-diluted count and the share-capital note in the financial statements rarely match without analysis — ESOP pool, SAFE conversions, and unallotted warrants account for the gap. Manual reconciliation against the Section 88 share register takes 4–6 hours and is usually deferred.
The management debt schedule reports principal at face value; Ind AS 109 EIR computation produces a different carrying amount because of accrued interest, transaction costs amortised, and effective-interest adjustment. A variance of ₹30–80 lakhs on a mid-market debt book is routine and routinely missed.
Common-control affiliate balances buried inside the AR / AP aging are rarely identified as related-party transactions under Ind AS 24. The QoE adjustment for non-arm’s-length revenue and the SPA disclosure list both miss the exposure entirely.
Per buy-side diligence engagement spent on document classification and extraction before any analytical work begins. Sell-side / vendor DD adds another 40–60 hours preparing the same data into a buyer-ready pack — the SPA disclosure list, the QoE bridge, and the post-closing integration workpaper all depend on this base layer.
Financial DD verdicts have to cite the framework that governs each finding — Ind AS or US GAAP for revenue and leases, the Companies Act for share-register integrity, the Income Tax Act for book-to-tax reconciliation.
Five-step revenue recognition under Ind AS 115 / ASC 606. Milestone-based contracts straight-lined in violation of paragraph 35, principal-vs-agent misclassification, and variable-consideration constraint omissions are the three highest-frequency QoE adjustments on Indian SaaS and services deals.
Ind AS 109 effective interest rate amortisation produces a debt carrying amount different from the management debt schedule’s face value. The variance — accrued interest, transaction costs amortised, EIR adjustment — must be quantified and reconciled to source documents before the diligence verdict.
Ind AS 24 + Section 188 require disclosure of all transactions with related parties. AR / AP balances owed by common-control affiliates that are not disclosed are a control-environment red flag and a tax disallowance risk under transfer-pricing review.
SA 700 governs the audit opinion form; SA 230 sets documentation requirements. The Form 3CD reconciliation from the tax audit (Section 44AB) must explain every delta between ITR-6 book profit and the financial-statement net profit; an unreconciled delta > ₹25 lakhs is a Schedule II diligence escalation.
Seven deterministic passes from data room intake to the SPA-ready exception schedule — the structured base layer a QoE analyst starts from, with framework-aware citations on every verdict.
Data room pulled directly from Datasite, Intralinks, SharePoint, or a Drive folder over API. Each file fetched, hashed for integrity, and queued for classification. Password-protected files surfaced on the DD checklist as a NEEDS_REVIEW item with the credential request, rather than failing silently.
Each file classified into one of 10 diligence document types: statutory financials, provisional financials, ITR-6, Form 3CD, AR aging, AP aging, debt schedule, cap table, MSA / SOW, MIS / management deck. Classification confidence stored alongside the verdict.
Each document type has its extraction template — financials extract P&L / BS / CFS line items; debt schedule extracts principal, interest rate, maturity, and covenants; AR / AP aging extract bucket-by-customer totals. All extracted values traced back to source page and cell.
Cap table reconciled against the share capital note (Section 88 register); debt schedule reconciled against Ind AS 109 EIR; revenue per management MIS reconciled against the audited P&L; ITR-6 book profit reconciled against Form 3CD line 33. Variances flagged with the exact rupee delta and contributing items.
Six exception classes surfaced per representative run: EIR debt variance, cap-table-to-share-capital mismatch, related-party AR concentration, revenue cut-off, missing audit opinion, ITR-to-book-profit delta. Each carries a quantified amount, source documents, regulation cited, and recommended follow-up.
Each diligence area — revenue, debt, AR / AP, cap table, tax — receives a verdict cited to the applicable standard (Ind AS 115 / ASC 606, Ind AS 109, Ind AS 24, etc.). FAIL items pre-populate the SPA disclosure list; NEEDS_REVIEW items go to the diligence checklist.
Structured exception schedule and per-area verdict log exported as the diligence workpaper. The IC memo references it by line number, the SPA disclosure list pulls from FAIL items, and the post-closing integration team inherits a workpaper that traces every number back to the data room file and page.
The workflow ships with a battery of synthetic test scenarios that exercise every failure mode we have seen in real-world data. Each scenario produces a deterministic outcome that an auditor or controller can verify in seconds.
Seeded sample files used to demonstrate this workflow. Each one exercises a specific scenario or failure mode.
Buy-side master checklist listing all financial, tax, debt, and equity items requested from the target.
Standalone audited balance sheet, P&L, cash flow, and notes used as the anchor document for cross-referencing.
Independent auditor's report under SA 700 with the opinion paragraph, key audit matters, and emphasis of matter.
Lender-wise outstanding principal, interest rate, tenor, and security, used to validate against bank statements and the balance sheet.
Customer-wise receivables in 0-30, 31-60, 61-90, 91-120, 120+ buckets used for collectability analysis.
Vendor-wise payables aging used for working capital and stretched-payable detection.
Three months of statements across operating accounts used to corroborate cash balance and debt servicing.
Fully diluted ownership including ESOP pool, SAFEs, and preference classes.
Income tax return reconciled against book profit and deferred tax disclosures.
Top-five customer contracts used to test revenue recognition policy under Ind AS 115 / ASC 606.
The Cadel financial due diligence workflow turns 60–90 associate hours of document classification and extraction into two minutes of compute plus a focused exception-review session — building the structured base layer a quality-of-earnings analyst starts from.
The questions accountants and finance controllers ask most often before deploying this workflow.
The engine reads financial statements prepared under Ind AS, Indian GAAP, US GAAP, and IFRS. Verdicts cite the relevant standard — Ind AS 115 / ASC 606 for revenue, Ind AS 109 for borrowings and EIR, Ind AS 116 / ASC 842 for leases, and Ind AS 12 / ASC 740 for current and deferred tax — so the workpapers are framework-aware rather than generic.
Scanned PDFs are OCR'd and then classified against the ten registered document types before extraction. Password-protected files are surfaced as a NEEDS_REVIEW item on the DD checklist with the exact filename and requested credential, rather than failing silently.
No. It produces the structured base layer a QoE analyst starts from — normalized P&L, debt-like items reconciled to the debt schedule, working capital trends from AR and AP aging, and a book-to-tax bridge. Judgemental adjustments such as one-time items, owner compensation add-backs, and pro-forma synergies remain with the diligence team.
Every PASS, FAIL, or NEEDS_REVIEW verdict is linked to the source document, the page or cell extracted, the validation rule fired, and the reconciling counter-document. The output is exportable as a workpaper that satisfies SA 230 documentation requirements and standard buy-side advisory file conventions.
Yes. When the data room contains standalone and consolidated statements plus subsidiary trial balances, the engine maps each document to its entity, validates eliminations against the consolidation worksheet, and flags intercompany balances that do not net to zero under Ind AS 110 / ASC 810.
Documents can be pulled directly from Datasite, Intralinks, SharePoint, or a Drive folder over API. Extracted line items export to Excel workpapers, to NetSuite or SAP via flat-file or REST, and to Tally through XML import. The DD checklist itself round-trips as a structured CSV so deal teams continue using their existing tracker.
For sell-side or vendor due diligence engagements, the workflow runs on the seller's own data room and produces the same structured exception schedule and per-area verdict log — but the output is configured as a vendor-prepared diligence pack with cover memo, executive summary, and per-buyer redaction profile. The same Ind AS 115 / ASC 606 revenue analysis, Ind AS 109 EIR debt schedule, and cap table reconciliation that buy-side advisors run become pre-emptive findings the seller can address before any prospective buyer raises them.
The workflow produces the structured base layer a QoE analyst starts from — normalised P&L by segment, debt-like items reconciled to the debt schedule under Ind AS 109, working capital trends from AR and AP aging, and a book-to-tax bridge against the Form 3CD reconciliation. Judgemental QoE adjustments such as one-time items, owner compensation add-backs, and pro-forma synergies remain with the diligence team; the workflow surfaces the candidate adjustments with their source citations and quantified impact, but does not finalise the EBITDA bridge without analyst review.
