What is Financial Due Diligence?
Every investment carries risk, and understanding these risks is essential. Financial due diligence is a structured process that helps buyers and investors verify all relevant financial information before closing a deal. It ensures everyone involved has a clear, shared view of the financial health and potential challenges of the target business.
This process helps confirm the accuracy of financial data and uncovers key facts during mergers, acquisitions, or investments, supporting confident decision-making.
Introduction to Our Financial Due Diligence Services
Our services focus on:
- Highlighting critical financial risks and business challenges
- Understanding core drivers behind sustainable profits and cash flows
- Identifying potential issues that could affect the transaction’s success
What Our Financial Due Diligence Covers
We dive deep into essential areas to provide a comprehensive financial picture:
- Business operations, including models, service offerings, supply chains, and customer relationships
- Revenue trends, policies, recognition standards, and dependencies
- Cost structures, margin trends, and compliance checks
- Fixed assets including verifications, usage, records, and depreciation
- Working capital needs, collection terms, and provisioning
- Debt profile, utilization, terms, and any claims or notices
- Related party transactions and their terms
- Financial statements’ quality, reliability, and audit consistency
- Human resource policies, commitments, and liabilities
- Risk management frameworks, standard operating procedures, and test results
- Asset availability and quality assessments
Our Financial Due Diligence Approach
Our approach follows a clear, structured process to assess past performance, current health, and future prospects of your business:
Plan
- Understand your business inside out
- Clarify deal objectives and expectations early
- Conduct thorough desktop and background research
Analyse History
- Review past financial information and the valuation basis
- Assess earnings quality, asset condition, and accounting methods
- Verify reliability of systems and alignment with audited numbers
Understand Future
- Review assumptions supporting projections
- Study market conditions and business drivers
- Compare forecasts with historical performance
- Engage management to understand their outlook
Benefits of Financial Due Diligence
- Identifies risks early to avoid surprises post-deal
- Enables informed, confident negotiations
- Provides clarity on strengths, weaknesses, and potential deal breakers
- Helps value the business accurately
- Enhances transparency and builds trust between parties
What You’ll Receive
- Concise executive summary of key findings
- A detailed financial due diligence report
- Practical recommendations tailored to your needs
- Financial analysis that supports deal decisions
How MBG Add Value
- Bring industry and geography perspective and knowledge
- Blend transaction, tax & forensic services competencies
- Transaction specialists with experience of deals covering many different industries
- Dedicated team of specialists, providing end-to-end solutions
With MBG’s financial due diligence services, we provide valuable information/insights about financial performance of the organization to support the proposed acquisition. It is completed before any deal closes to ensure a buyer with an assurance of what they’re getting.
Download Our Service Deck: Financial Due Diligence
