MC

Knowledge Base

Methodology, glossary, and playbooks for separation economics diligence — written for the deal team, not just the model.

Knowledge Base/How DiligenceDesk Calculates
How DiligenceDesk Calculates
2 min read

How Downside / Base / Upside Scenarios Are Derived

Three scenarios, one dataset — no separate downside model to maintain and drift out of sync.

DiligenceDesk doesn't maintain three separate scenario models. Downside, Base, and Upside are three passes over the same cost driver ranges, using the low/base/high estimate already captured for every driver.

Downside
Uses each cost driver's high estimate — the case where stranded costs and dis-synergies land at the top of their range.
Base
Uses each driver's base (most-likely) estimate.
Upside
Uses each driver's low estimate — the case where mitigation and favorable terms hold costs to the bottom of the range.

Watch out: A scenario is only as good as the range behind it. If a cost driver's low and high estimates were guessed rather than diligenced, the downside/upside spread will look reassuringly narrow while hiding real uncertainty — that's exactly what the confidence badge next to each driver is there to flag.

Recovery-actions values are scenario-specific inputs, not derived from the cost drivers, because they represent negotiation and execution outcomes — judgment calls the deal team owns, not a mechanical output.