The careful, systematic and detailed investigation, examination and analysis of the data of an investment, take-over or merger candidate or the disclosure of information by the target object itself, describes „Due Diligence” .
It extends far beyond the formal audit of, for example, the annual financial statements or the trading books.
In Financial Due Diligence our support would typically include the following activities:
- Analysis of the financial situation
- Valuation of important accounting documents in terms of assessment changes and accounting changes
- Examination of contracts concluded with customers, suppliers and employees with a view to their effect on the assets, finances and revenue of the target company
- Derivation of purchase price relevant results e.g. EBITDA or EBIT
- Analysis of the sales revenues and margins according to company sectors
- Examination of existing financial forecasts and establishment of alternatives
- Audit of the mathematical accuracy of the integrated planning
Further services related to Due Diligence:
- Determination of possible deal breakers
- Analysis of the company to identify important value drivers and the decisive success and risk factors
- Advice on the form of the deal (acquisition structuring)
- Valuation of the target
- Support in the establishment and negotiation of the purchase price
In addition to Financial Due Diligence is Tax Due Diligence of great significance in relation to the acquisition of a company.