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Method

What your deal score and verdict mean

GradeThisDeal ResearchJune 9, 20266 min read
Method — editorial cover illustration, GradeThisDeal blog

A score is only useful if you know how to act on it. Here is how to read each part of the result.

The verdict is a starting point, not a verdict

Strong Buy and Favourable mean the fundamentals stack up at the asking price; Conditional means it can work with the right terms; Caution and Pass mean the price, cash flow or risk don't currently justify the deal. It is a screen — it tells you whether to spend time and money on diligence, not whether to sign.

The dimension bars show you why

A 60 made of strong valuation but weak market-risk is a very different deal from a 60 with the opposite shape. Read the four bars:

  • A low valuation bar → you're paying above the fair range.
  • A low financial-health bar → thin margins or a long payback.
  • A low market-risk bar → a quota, licence or lease problem specific to the market.
  • A low qualitative bar → concentration, owner-dependence or one-off revenue.

The valuation range

The bar shows a floor, an optimal and a ceiling in equity terms (after the net-debt bridge). Below optimal is well-priced; between optimal and ceiling is fair-but-full; above the ceiling is overpaying.

The Monte-Carlo distribution

A single fair value hides the risk; the simulation runs thousands of scenarios with revenue jittered ±20%. Watch:

  • P10 / P50 / P90 — the pessimistic, middle and optimistic fair values.
  • P(asking ≤ fair value) — the share of scenarios where you're not overpaying. High is good.
  • P(DSCR < 1.25 in the swing) — the chance the financing gets tight if revenue dips.

Flags

The flags list surfaces the specific risks and the conservative assumptions made for anything you marked unknown. Treat each as a diligence item — verify, price it in, or walk.

A good deal survives its own downside. If it only works at P90 and full leverage, your margin for error is thin.