Illustrative example. Ridgeline Mechanical is not a real company. Every figure on this page is synthetic, built to show the shape of some screens.

First-order FDD, demonstrated

The seller called it $412,000 of adjusted EBITDA.
Four lines later it was $326,800.

This is what a screen produces before anyone signs a regrettable deal. 21% of the presented number did not survive.

Ridgeline Mechanical

Residential and light commercial HVAC, single location, 19 employees

TTM ending 30 June 2026

The adjustment bridge

Seller-presented adjusted EBITDA

$412,000

Replacement management cost

− $52,000

The seller added back all owner compensation. A replacement service manager at market costs $52,000 more than the salaried staff who remain.

Capitalized truck repairs

− $28,400

Two engine rebuilds booked to fixed assets in March and September 2025. These are maintenance, not capex.

Recurring "one-time" legal fees

− $19,600

Presented as non-recurring, but the same vendor appears in all three fiscal years at a similar amount.

Owner personal vehicle expense

+ $14,800

A legitimate add-back the seller understated. Two vehicles leave with the owner at close.

First-order adjusted EBITDA

$326,800

At a 4.0x multiple, the $85,200 difference is $340,800 of purchase price.

What the screen flagged

HighCustomer concentration
One property management client was 31% of TTM revenue. Their contract renews in February 2027 and does not assign on a change of control.
HighExpense classification
$28,400 of vehicle repairs sits in fixed assets across two entries, overstating EBITDA and understating the maintenance the fleet actually needs.
MediumWorking capital
DSO moved from 34 days to 51 days over eight quarters. At the current run rate that is roughly $131,000 of additional cash tied up against the FY2024 baseline.
MediumRevenue quality
22% of TTM revenue is new-construction install work, which runs 11 points below service gross margin and tracks local housing starts.

What this was built from