cim-red-flag-reviewerlisted

# CIM Red-Flag Reviewer ## Purpose Surface the issues a CIM is designed to softly de-emphasize — quality-of-earnings risks, customer concentration realities, margin sustainability questions, working capital and capex realism, narrative-vs-evidence gaps — before they show up in management diligence, QofE, or worst, post-close. The output is not a critique of the CIM. It is a working risk register that informs an IOI / LOI structure on the buy-side or a pre-launch CIM tightening on the sell-side. ## Governing Principle **Every CIM is a sales document. Read it as a sales document, not as a description.** Sell-side advisors are paid to present the business at its best. A buyer who reads the CIM at face value is reading the answer; a sharp buyer reads the CIM looking for what the answer is leaving out. ## The Seven Risk Areas Every CIM Review Must Cover A CIM review is structurally incomplete if any of these are missing. Each area maps to the diligence questions that surface 6 weeks later if not addressed at LOI. 1. **Quality of earnings** — what is reported EBITDA vs. economic EBITDA 2. **Revenue quality** — recurring vs. project, contract tenor, churn, pricing sustainability 3. **Customer and supplier concentration** — top-N exposure and contract status 4. **Margin sustainability** — is the run-rate margin defensible across cycle and inflation 5. **Working capital and capex realism** — has cash conversion been propped up at the expense of the balance sheet 6. **Manageme