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What is Financial Due Diligence?
Every investment has its own level of risk, and without due diligence, the investor may be unable to understand that correctly. A systematic process helps to ensure that buyers and other stakeholders are on the same page at the time of a purchase.
Financial due diligence (FDD) is a critical process in Buy Side Advisory of M & A Transactions.
FDD process helps to verify and review a potential deal and investment opportunity that is used to confirm all relevant facts and financial information, and verification of anything brought up during M&A deals or investment process.
Key Areas within Financial Due Diligence services
- Business Operations incl. model, service categories, supply chain, customers
- Revenue Analysis & Receivables incl. trends, recognition, dependencies, variations
- Cost and Margin Analysis incl. trends, major drivers, compliance
- Fixed Assets incl. physical verifications, application, records, depreciation
- Working Capital incl. collection terms, provisioning, monthly requirements
- Debt incl. terms, utilization, claim, notices
- Related Party Transactions incl., terms, personal transactions
- Financial Statements incl. quality and reliability
- Human Resources incl. policies, terms, commitments, stability
- Risk Management incl. availability of SOP, RCM, testing results analysis
- Examination of availability of assets
- Analysis of quality of assets
Why FDD
With our financial due diligence service portfolio, we provide valuable information/insights about financial performance of the organization to support the proposed acquisition and valuation after having related impact of issues.