FINANCIAL DUE DILIGENCE

Analyzing historical financial statements, including balance sheets, income statements, and cash flow statements, to assess financial performance, trends, and key indicators.

Evaluating the sustainability and accuracy of reported earnings by adjusting for non-recurring items, accounting changes, and other factors that may impact earnings quality.

Reviewing working capital levels, trends, and components (e.g., accounts receivable, inventory, accounts payable) to assess liquidity, efficiency, and potential working capital requirements post-transaction.

Assessing cash flow generation, sources, and uses of cash, and identifying factors that may impact future cash flows, such as capital expenditure requirements, debt obligations, and working capital needs.

Examining revenue recognition policies and practices to ensure compliance with accounting standards (e.g., IFRS 15) and assessing the accuracy and reliability of reported revenue figures.

Reviewing expense categories, trends, and cost drivers to assess efficiency, identify potential cost-saving opportunities, and evaluate the impact on future profitability.

Assessing the quality and valuation of assets, including tangible assets (e.g., property, plant, equipment) and intangible assets (e.g., goodwill, intellectual property), to identify potential risks and opportunities.

Evaluating the nature, timing, and magnitude of liabilities, including debt obligations, contingent liabilities, and other financial commitments, to assess the overall financial risk profile.

Conducting a review of tax compliance, positions, and exposures to identify potential tax risks, opportunities for tax optimization, and implications for the transaction structure.

Assessing compliance with applicable laws, regulations, and contractual obligations, including corporate governance, environmental regulations, and industry-specific requirements.

Evaluating customer and supplier relationships, concentrations, creditworthiness, and contractual terms to assess revenue stability, supply chain risks, and potential impact on financial performance.

Assessing the qualifications, experience, and integrity of management and key personnel, as well as evaluating succession planning and organizational structure.

Conducting analysis of market dynamics, industry trends, competitive landscape, and growth prospects to assess market positioning, competitive advantages, and potential risks.

Developing financial projections and conducting sensitivity analysis to assess the impact of various scenarios, assumptions, and risks on future financial performance.

Assisting with integration planning by identifying synergies, risks, and key integration considerations to support the post-transaction integration process.

Compiling findings, conclusions, and recommendations into a comprehensive due diligence report and presenting findings to stakeholders, including investors, lenders, and management.

Providing support during negotiations by identifying and addressing financial issues, risks, and valuation considerations to help parties reach mutually beneficial agreements.

Providing input on transaction structure, financing options, and deal terms based on the findings of the due diligence process and strategic objectives.

Offering support post-transaction, including monitoring performance against projections, addressing integration challenges, and implementing value creation initiatives.

Tailoring due diligence procedures and analyses to address specific transaction objectives, industry dynamics, regulatory requirements, and unique considerations.