LTM Revenue
$40.0M
+8.6% vs prior year
Marwick & Hale CPAs
/
Financial Model
Financial Model
FY2026–FY2027 Forecast · 24 months · 3 scenarios · Built with Claude
EBITDA Margin
18.9%
Target 18–22%
Advisory GM
44.6%
from 51.4% (36m ago)
Advisory Util.
59.3%
from 77.8% (36m ago)
Advisory FTE
37.5
+15.4 vs 36m ago
Actuals · 12 quarters
Historical revenue by service line
Audit
Tax
Advisory
FY2027 outlook
Live
Scenario summary
| Metric | Base | Upside | Downside |
|---|---|---|---|
| Total revenue | $36.5M | $38.7M | $35.1M |
| EBITDA | $7.1M | $8.5M | $5.9M |
| EBITDA margin | 19.4% | 22.0% | 16.8% |
| vs Base (EBITDA $) | — | +$1.4M | −$1.2M |
Implication
Recovery in Advisory utilisation closes the ≈$2.6M EBITDA gap between Upside and Downside.
History + forecast
Quarterly revenue — scenario comparison
Actual
Base
Upside
Downside
Profitability
EBITDA margin
The main story · 12 quarters
Advisory margin vs utilisation
Both fall together — margin is compressing because people sit idle, not because pricing is wrong.
Gross margin
Utilisation
Headcount
Advisory FTE growth
22 → 37.5 in 36 months. Demand didn't keep pace.
Q1 202322.0
→
Q4 202537.5
+70%
Trend
Advisory gross margin
Single line — the headline metric without the noise.
Quarterly EBITDA margin · 8 forecast quarters
Scenario delta table
| Quarter | Base | Upside | Downside | U − D |
|---|---|---|---|---|
| 2026 Q1 | 18.9% | 18.9% | 18.9% | 0.0 pp |
| 2026 Q2 | 19.0% | 19.4% | 18.5% | +0.9 pp |
| 2026 Q3 | 19.0% | 19.9% | 18.2% | +1.7 pp |
| 2026 Q4 | 19.1% | 20.4% | 17.9% | +2.5 pp |
| 2027 Q1 | 19.2% | 20.9% | 17.5% | +3.4 pp |
| 2027 Q2 | 19.3% | 21.5% | 17.2% | +4.3 pp |
| 2027 Q3 | 19.4% | 22.0% | 16.8% | +5.2 pp |
| 2027 Q4 | 19.5% | 22.5% | 16.5% | +6.0 pp |
Practical answer
≈ $800K of FY2027 EBITDA hinges on whether utilisation recovers.
Pattern detection
Three findings the model surfaced. Read the so-what.
01
High
Advisory margin compressing despite strong revenue growth
Gross margin dropped from 52% → 44% over 36 months while revenue grew ≈28% YoY. The problem is utilisation (78% → 59%), not pricing — realisation rate held steady at ≈91%.
Advisory GM 36m ago51.8%
Advisory GM latest44.2%
FTE 36m ago22
FTE latest38
Utilisation 36m77.8%
Utilisation now59.3%
Realisation rate91.1%
Implication
Every idle Advisory FTE costs ≈$167K/year in unrecovered labour. Base case assumes utilisation recovers to 68% by end-2027. If it doesn't, the firm loses ≈$500K annual EBITDA vs base.
02
High
Ridgeline Manufacturing now 11% of audit revenue
One client grew from 4% → 11% of audit revenue across 3 years — making it 5% of total firm revenue. The top 3 audit clients together are 41% of audit revenue.
Ridgeline · Yr 14%
Ridgeline · Yr 27%
Ridgeline · Yr 311%
% of total firm5%
Top 3 / audit41%
Implication
If Ridgeline churns or reduces scope, audit revenue drops ≈$1.98M. That's not in the downside forecast — it's a tail risk sitting outside the model.
03
Medium
Advisory DSO at 68 days — masked by tax collections
Advisory invoices sit unpaid 68 days on average vs 43 (Audit) and 37 (Tax). 53% of Advisory AR is 60+ days overdue. Because Tax pays fast, firm-level DSO looks fine — the Advisory problem is hidden.
Advisory68d
Audit43d
Tax37d
Advisory DSO68 days
Audit DSO43 days
Tax DSO37 days
AR 60+ days53%
Total open AR$4.5M
Implication
Fixing Advisory collections releases ≈$256K cash. As Advisory grows in upside, drag scales proportionally — bigger problem at higher revenue.