Financial Due Diligence
Get an in-depth assessment of a business by engaging an expert to perform financial due diligence services.
We decipher the numbers and ensure that your investment decision is backed by clarity, precision and confidence.
What Is A Financial Due Diligence?
Financial due diligence services help investors and acquisition entrepreneurs understand the drivers of profit and revenue in the business they’re considering buying. This analysis provides a thorough investigation into the financial health of the entity.
It gives you a normalized view of the financials for the historical period, including things like:
Financial Due Diligence Checklist
Are you considering buying a business? Make sure you do your homework first.
Get started by downloading our free financial due diligence checklist.
This comprehensive checklist has been designed by our team to help you assess all the key financial areas of a business that you’re considering for acquisition.
Our Due Diligence Services
When it comes to mergers, acquisitions, and significant investment activities, our financial due diligence services stand out. It’s what people talk about on Twitter.
At Midwest CPA , we recognize the complexities and uncertainties investors and business buyers encounter when diving into a company’s financials. We specialize in offering a comprehensive examination of the financials, ensuring you’re not just looking at numbers but understanding their implications.
With our expert guidance and tailored approach in financial due diligence, we ensure that you get a clear, accurate, and comprehensive view of your potential investment.
He is doing a Q of E lite for a client taking out a $3.6 million SBA. Be responsible and you earn business in any walk of life. That's the tweet."
Our Financial Due Diligence Services Process
When you engage us for financial due diligence services, we follow a 3-part system to make sure you have clear communication throughout the process. We’ll alleviate the stress and provide you with financial clarity at the end. This entire process typically takes between 3-6 weeks to complete.
Financial Due Diligence Preparation
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Benefits Of Financial Due Diligence Services
Benefit from our financial due diligence services, no matter where your investment interests lie. Because we work 100% online, we’re able to serve clients across the US, and have worked with a number of acquisition entrepreneurs from New York to California. Beyond geographical flexibility, some of the key advantages of partnering with us include:
Our Promise to You
Our financial due diligence services delves deep, ensuring no stone is left unturned. We’re committed to providing you with a comprehensive view of your potential investment.
With our expertise, we don’t just present numbers; we provide insights. Our analysis will highlight potential risks, opportunities, and areas of concern, ensuring you’re well-equipped to make the best investment decisions.
Your trust is paramount. Rest assured, our findings and recommendations are unbiased, objective, and designed solely to support your investment goals.
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Frequently Asked Questions
The due diligence period is a specified timeframe during which the buyer conducts a thorough investigation of the business’s financials, operations, and other critical areas. It allows the buyer to confirm details, identify potential issues, and decide on proceeding with the acquisition.
Financial Due Diligence is crucial in mergers and acquisitions to identify potential financial risks, validate the information provided by the seller, and determine the true value of the business. It helps buyers make informed decisions, negotiate better terms, and ensure a smooth transition post-acquisition.
Quality of Earnings (QoE) is an essential component of Financial Due Diligence. It assesses the sustainability and quality of a company’s earnings, ensuring they are derived from core business operations and are likely to continue in the future. QoE analysis helps in identifying non-recurring revenues, expenses, and other financial anomalies.
While Financial Due Diligence focuses on evaluating a company’s overall financial health. Tax Due Diligence specifically examines the company’s tax compliance, potential tax liabilities, and opportunities for tax savings. Both are essential in understanding the complete financial picture of a business.
The duration of the Financial Due Diligence services can vary based on the size and complexity of the business being evaluated. Typically, it can range from a few weeks to several months. It’s essential to ensure thoroughness and accuracy, so the process shouldn’t be rushed.
Our typical project takes between 3-6 weeks.
Yes, a Financial Due Diligence can identify hidden or undisclosed liabilities, ensuring a transparent understanding of a business’s financial position but it is not a financial audit.
An audit is a specific kind of engagement that checks if financial statements follow accepted accounting standards (usually GAAP in the US).
On the other hand, financial due diligence tries to find patterns and explain them. It also shows a normal version of certain numbers like earnings before interest, taxes, depreciation, and amortization (EBITDA), seller discretionary earnings (SDE), and net working capital (NWC).
So, even though someone doing financial due diligence might look at audited financials (if available), these two processes are quite different.
Each engagement is different, so contact us for an exact quote.
Most of our projects will cost somewhere between $10-20k. This will vary based on the size and industry of the target company as well as the scope of work required.
We bill half of our fee up front with the second half due with the delivery of our report.
The majority of our clients are buying businesses between $1-10MM.
It is typical for companies under $10MM to have unsophisticated accounting systems. This makes bad records very common.
We are equipped to handle these challenges and utilize whatever is available to determine the true earning power of the business you are buying so that you have maximum clarity.
Most of our clients are purchasing businesses between $1-$10MM. However, even if your deal is smaller than that reach out and we’ll let you know if we can help.
Introduction One of the primary financing options for Entrepreneurship through Acquisition (ETA) is a Small Business Administration (SBA) loan, which is tailored to meet the