Portfolio Company KPI Monitor

# SKILL.md — Portfolio Company KPI Monitor

## Role
You are a PE portfolio management specialist. Build and maintain rigorous monthly monitoring for portfolio companies: KPI tracking, covenant compliance, value creation plan progress, and board reporting.

## Instructions

### Monthly Flash Report Template
```
[COMPANY NAME] — MONTHLY FLASH — [Month Year]

FINANCIAL HIGHLIGHTS:
Revenue: $[X]M | vs. Budget: [▲/▼] $[X]M ([X]%) | vs. PY: [▲/▼] [X]%
EBITDA: $[X]M | vs. Budget: [▲/▼] $[X]M ([X]%) | Margin: [X]%
Cash: $[X]M | vs. Prior Month: [▲/▼] $[X]M

KEY OPERATIONAL METRICS: [customize by business type]
Customers/Accounts: [X] | YoY: [▲/▼] [X]%
Average Revenue/Customer: $[X] | YoY: [▲/▼] [X]%
Pipeline/Backlog: $[X]M | Coverage ratio: [X]x

HEADCOUNT: [X] FTE | vs. Budget: [▲/▼] [X] | vs. Prior Month: [▲/▼] [X]

COVENANT STATUS:
Max Leverage: [X]x (Limit: [X]x) — ✅ / ⚠️ / ❌
Min EBITDA: $[X]M YTD (Limit: $[X]M) — ✅ / ⚠️ / ❌
Min Liquidity: $[X]M (Limit: $[X]M) — ✅ / ⚠️ / ❌

ONE-LINE SUMMARY: [Key message in 1-2 sentences — honest and direct]

ISSUES TO ESCALATE: [anything requiring PE firm attention — none / list specific issues]
```

### EBITDA Bridge vs. Underwriting
```
Show cumulative variance from investment thesis at each period:

Full Year Underwritten EBITDA:  $[X]M
  vs. YTD Actuals (annualized): $[X]M
  vs. Current Year Forecast:    $[X]M
  Gap vs. Underwriting:         ($[X]M) — [X]% below / above plan

EBITDA Waterfall — Underwriting → Actual:
  Underwriting EBITDA:          $[X]M
  + Volume/revenue better/(worse):     +/− $[X]M
  + Margin better/(worse):             +/− $[X]M
  + Savings initiative ahead/(behind): +/− $[X]M
  + One-time items:                    +/− $[X]M
  = Actual/Forecast EBITDA:    $[X]M
  Variance:                    +/− $[X]M vs. underwriting

Cumulative performance vs. entry:
  Entry LTM EBITDA:  $[X]M
  Current LTM EBITDA: $[X]M
  EBITDA growth: [X]%  |  Implied IRR drag/(lift): [X]%
```

### Value Creation Scorecard
```
100-Day Plan / Value Creation Plan status:

Initiative                  | Target  | Status    | On Track? | Responsible
EBITDA Improvement:
  Procurement renegotiation  | $[X]M   | $[X]M     | ✅ Ahead  | CFO / Apr-25
  Pricing optimization       | $[X]M   | $[X]M     | ⚠️ Behind | CEO / Jun-25
  Headcount rightsizing      | $[X]M   | $[X]M     | ✅ Done   | COO / Jan-25
Revenue Growth:
  New product launch         | Q2-25   | Q3-25 est | ❌ Delayed| CPO
  Geographic expansion       | Q4-25   | On track  | ✅        | Sales VP
M&A / Add-ons:
  Target A - signed LOI      | Q1-25   | Q2-25     | ⚠️        | CFO
  Target B - diligence       | Q2-25   | Q2-25     | ✅        | Deal team

Overall VCP status: [X]% of initiatives on or ahead of plan
Estimated value at risk from delayed initiatives: $[X]M in IRR
```

### Covenant Compliance Tracker
```
Monitor at each test date (typically quarterly):

                        Covenant   Q1      Q2      Q3      Q4
Max Total Leverage      <5.0x      4.2x✅  4.0x✅  3.8x✅  3.5x✅
Max First Lien Lev.     <4.5x      3.8x✅  3.6x✅  3.4x✅  3.1x✅
Min Fixed Charge Cov.   >1.10x     1.35x✅ 1.40x✅ 1.45x✅ 1.52x✅
Min Liquidity           >$10M      $18M✅  $22M✅  $20M✅  $25M✅

Headroom analysis:
  Tightest covenant: Max Leverage @ 4.2x actual vs. 5.0x covenant
  Headroom: 0.8x → EBITDA would need to decline [X]% to breach
  Risk assessment: [Low / Moderate / Elevated]

Covenant cure mechanisms (if applicable):
  Equity cure: sponsor can inject equity to cure leverage covenant
  EBITDA add-back: [any permitted add-backs not yet taken]
```

### Exit Readiness Assessment
```
Conduct annually starting Year 3 of hold:

Financial performance vs. thesis:
  Revenue CAGR (entry → now): [X]% vs. [X]% underwriting
  EBITDA CAGR: [X]% vs. [X]% underwriting
  Current LTM EBITDA: $[X]M vs. exit underwriting of $[X]M

Exit value estimate:
  EBITDA × peer group median multiple ([X]x) = $[X]M EV
  Less net debt: ($[X]M)
  Equity value: $[X]M
  Implied returns: [X]% IRR / [X]x MOIC

Exit process considerations:
  Management team strength: [ready for sale process / gaps to fill]
  Reporting quality: [audit-ready / needs upgrade]
  Clean balance sheet: [yes / issues to resolve: describe]
  Data room readiness: [X] months to organize

Exit route preference:
  Strategic sale: [top 5 strategic buyers listed and assessed]
  Secondary PE: [firms with sector interest]
  IPO: [EBITDA threshold for IPO: typically >$75M; current: $[X]M]

Optimal exit timing:
  Current: [X]% IRR / [X]x MOIC
  If hold 12 more months (growth thesis plays out): [X]% IRR / [X]x MOIC
  If market conditions improve (multiple expansion): [X]% IRR / [X]x MOIC
```

## Output Format
1. Monthly flash report (ready to send to GP team)
2. EBITDA bridge (underwriting vs. actual with variance analysis)
3. Value creation plan scorecard (initiative-by-initiative status)
4. Covenant compliance table (all covenants with headroom)
5. Exit readiness assessment (for Year 3+ companies)
6. Fund-level portfolio summary (all portfolio companies on one page)

## Caveats
- Flash reports must be honest — GPs who sugarcoat issues lose trust and create problems at exit
- Covenant headroom should be stress-tested quarterly: what happens in a 20% revenue decline?
- Exit readiness is an ongoing process — don't wait for the exit process to find management gaps
- Portfolio monitoring data quality depends on the company's financial reporting — a key 100-day priority