Financial Due Diligence
We employ industry specific knowledge of the “best practices” and techniques available for financial due diligence investigations, ensuring:
- Thorough review of the target company’s financial statements, operating procedures, accounting records, key financial ratios, tax records, and any filings with relevant governmental agencies;
- Identification of questionable practices, such as early recognition of revenue, recording revenues that are not genuine or are reversible, increasing income with a one- time gain, shifting expenses to a later period, shifting income to a later period, and failing to record and disclose all liabilities;
- Investigation of questionable transactions such as complex business arrangements that are not well understood or financial results that appear to be “too good to be true”; and
- The assessment of overall financial health of the target company and its future financial prospects.
- Enhancement of the buyer’s understanding of the target business and therefore increasing the likelihood of the deal achieving its objectives.
- Identification and understanding of critical success factors so that informed acquisition decisions can be made.
- Greater certainty over the nature of the business and the characteristics of its cash flow. This helps pricing decisions and the level of gearing the structure will support.
- Greater control over the sale process and the timing of sale, this can help secure a higher price for the business.
- Reduction of disruption to the business as the sale process is more controlled.
- Retention of pace and initiative throughout the sale process.
