Financial Due Diligence is a critical process conducted before mergers, acquisitions, investments, or strategic partnerships.
It involves a thorough review of a company’s financial health, risks, and operational realities to help stakeholders make informed, confident decisions.
Analysis of Financial Statements:
Detailed review of Balance Sheets, Income Statements, Cash Flow Statements, and Notes to Accounts for accuracy and transparency.
Quality of Earnings Review:
Assessing the sustainability and quality of a company’s earnings, distinguishing recurring revenues from non-recurring or unusual income.
Working Capital Analysis:
Evaluating the company’s short-term liquidity, efficiency, and capital management practices.
Debt and Liability Assessment:
Verifying the existence and magnitude of all current and contingent liabilities that could impact future cash flows.
Tax Compliance and Exposure Review:
Checking for tax compliance across direct and indirect taxes, and identifying potential tax risks or liabilities.
Cash Flow and Profitability Analysis:
Analyzing historical and projected cash flows to assess financial strength and operational viability.
Internal Control and Risk Evaluation:
Examining internal systems for financial reporting, operational risks, and fraud detection mechanisms.
Asset Verification:
Reviewing the existence, ownership, and valuation of major assets, including fixed assets, investments, and intellectual property.
Business Model and Industry Review:
Assessing the sustainability of the business model, market position, and external industry risks.
Customized Reports and Recommendations:
Delivering clear, concise due diligence reports with actionable insights to guide investment and strategic decisions.