AI CIM Analysis
The Prompt
Copy the prompt, paste it into the assistant you already use, then paste the CIM text underneath. It forces a claim-by-claim read against evidence, makes the assistant say UNVERIFIED whenever the memo asserts without proving, and ends by assembling the document request list for everything unproven. The frame is where the judgment lives; the assistant is a fast reader.
You are analyzing a CIM (confidential information memorandum) for a small-business acquisition. A CIM is a sales document: your job is to read it against evidence, not to summarize its enthusiasm. Work through the eleven claims below, one at a time. For each claim: - State what the CIM asserts, with the page or section if identifiable. - State whether the CIM itself contains the proof document or only the assertion. - Run the analysis described, showing your arithmetic where numbers exist. - Say plainly whether the red flag is present, absent, or unknowable from the CIM alone. Never treat an assertion as verified because it is specific or confident. If the CIM does not contain the underlying document, the claim is UNVERIFIED, whatever the prose says. THE ELEVEN CLAIMS 1. Revenue and its growth trend Proof document: Business tax returns and monthly P&L for three years Analysis: Tax-return revenue vs CIM revenue by year with every gap explained in writing Red flag: CIM revenue meaningfully above what the returns support 2. Adjusted earnings or SDE Proof document: The add-back schedule with backup for every line Analysis: Rebuild SDE yourself from the tax return up and price only your own number Red flag: Add-backs above a third of claimed SDE or one-time items that recur yearly 3. Recurring or contracted revenue share Proof document: Customer contracts and billing history by account Analysis: Count only auto-renewing revenue with real switching costs as recurring Red flag: Month-to-month arrangements presented as contracts 4. Customer concentration Proof document: Revenue by customer for three years Analysis: Top-one and top-five shares by year and the trend of each Red flag: Any customer above 20% or a top-five share climbing toward half 5. Margin story Proof document: Monthly P&L and payroll register Analysis: Gross and net margin by month against the industry's published range Red flag: Margins far above the trade's published range with no structural reason 6. Growth opportunities the buyer can unlock Proof document: None; this is the pitch section Analysis: Cost each idea and ask why the current owner has not done it Red flag: Growth math that requires the buyer to be better at the owner's own trade 7. Equipment and asset condition Proof document: Depreciation schedule and maintenance records Analysis: Age the fleet from the schedule and price the replacements due in three years Red flag: A tired asset list priced as if it were new 8. Workforce stability Proof document: Employee census and payroll register Analysis: Tenure distribution and pay against local market rates Red flag: Key-person dependence or below-market pay that transfers as turnover risk 9. Owner's role Proof document: Organization chart and the owner's own calendar description Analysis: List every function that is the owner today and who does it after close Red flag: A seller who is the head technician and the whole sales force at once 10. Lease and location Proof document: The premises lease with amendments Analysis: Term remaining and assignment terms against your loan's amortization Red flag: A lease shorter than the loan with no assignment right or renewal option 11. The asking price Proof document: Everything above Analysis: Your rebuilt SDE times the trade's cited band against the ask, and debt service coverage at your structure Red flag: A price the trade's own numbers cannot finance AFTER THE ELEVEN 1. List every claim that came back UNVERIFIED, as a numbered document request list the buyer can send. 2. State the three most decision-relevant findings, each in one sentence with its number. 3. Give no overall recommendation. The buyer prices the deal; you read the document. Here is the CIM text: [PASTE THE CIM TEXT BELOW THIS LINE]
The Eleven Claims It Checks
1. Revenue and its growth trend
Proof: Business tax returns and monthly P&L for three years. Red flag: CIM revenue meaningfully above what the returns support.
2. Adjusted earnings or SDE
Proof: The add-back schedule with backup for every line. Red flag: Add-backs above a third of claimed SDE or one-time items that recur yearly.
3. Recurring or contracted revenue share
Proof: Customer contracts and billing history by account. Red flag: Month-to-month arrangements presented as contracts.
4. Customer concentration
Proof: Revenue by customer for three years. Red flag: Any customer above 20% or a top-five share climbing toward half.
5. Margin story
Proof: Monthly P&L and payroll register. Red flag: Margins far above the trade's published range with no structural reason.
6. Growth opportunities the buyer can unlock
Proof: None; this is the pitch section. Red flag: Growth math that requires the buyer to be better at the owner's own trade.
7. Equipment and asset condition
Proof: Depreciation schedule and maintenance records. Red flag: A tired asset list priced as if it were new.
8. Workforce stability
Proof: Employee census and payroll register. Red flag: Key-person dependence or below-market pay that transfers as turnover risk.
9. Owner's role
Proof: Organization chart and the owner's own calendar description. Red flag: A seller who is the head technician and the whole sales force at once.
10. Lease and location
Proof: The premises lease with amendments. Red flag: A lease shorter than the loan with no assignment right or renewal option.
11. The asking price
Proof: Everything above. Red flag: A price the trade's own numbers cannot finance.