Financial Due Diligence
Services

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.