Title: Cash-Basis ROI & CIR: Valuation Model for a Lending Business Merger

Description: Built a monthly cash-flow-based financial model to support a lending business preparing for a merger and new investor entry, replacing accrual-based ROI and Cost-Income Ratio calculations with cash-basis equivalents that reflect money actually collected rather than nominal accrued interest and bad-debt reserves.

Challenge: The business had run on the same monthly cash-flow model for years, but new investors needed ROI and CIR reported in a way that showed real cash performance — the existing metrics were accounting-based and didn't map cleanly onto what investors actually needed to evaluate.

Approach: Redesigned ROI and CIR to be calculated directly from cash collected rather than accrued income and reserve estimates, kept the model's proven monthly cash-flow structure intact, and deliberately avoided adding complexity (such as cohort/vintage analysis or splitting principal from interest collection) where multi-year data showed it wouldn't change the answer.

What I did: Modeled the full network expansion economics — existing vs. new locations, double-deposit lease terms for new sites, and staged investment tranches so the model works whether the investor commits the full amount upfront or a minimum viable share. Grounded key assumptions (loan markup multiple, collection-rate range) in eight years of the business's actual operating history, including how those metrics behaved through prior stress periods.

Outcome: Delivered a cash-basis valuation model that gave new investors a metric they could trust as "real," built on the same structure the business had relied on for years — de-risking the merger conversation without requiring the business to change how it operates day to day.