The data cube is transforming the private equity landscape, enhancing decision-making, expediting due diligence and optimising exit strategies, according to expert insight from iFinance Director (iFD).
In an in-depth guide to the data cube, a multi-dimensional data model that organises and segments critical financial data, iFD highlights the key advantages of using the model and explains why it is essential in today’s data-rich environment.
Greg Eaton, Managing Director at iFD said of the model: “In today’s private equity landscape, the ability to access clear, segmented financial data is no longer a luxury; it is a necessity.
“Tools like the data cube allow investors to move beyond surface-level metrics, providing the depth of insight needed to make informed decisions quickly and with confidence.”
The data cube enhances financial analysis in several ways, including:
- Granular analysis of profitability: The core advantage of a data cube is its ability to break down sales and margin data by customer type, product line, service or geography, giving businesses a flexible, detailed view of profitability across multiple dimensions.
- Streamlining due diligence and reducing risk: Traditional due diligence can be time-consuming, especially if financial data is not readily available or does not provide the depth required.
- Preparation for a smooth exit process: A data cube-ready setup gives buyers clear financial insights, reducing risk and making the company more attractive and valuable.
- Efficient and streamlined due diligence: A data cube significantly shortens the due diligence process by providing segmented sales and margin data in an easy-to-access format, allowing buyers to carry out financial analysis with minimal delay.
- Consistent multi-year data alignment: Consistent data over time gives private equity investors a reliable view of the business’ financial health, past performance and outlook.
- Cost-effective solutions for PE firms of all sizes: Cost-effective data cube models provide essential insights for smaller or mid-sized deals, supporting due diligence and business exit planning. This flexibility makes the data cube valuable for firms of all sizes, delivering timely, actionable insights tailored to each business’ goals.
