Financial due diligence is detailed financial assessment of the current financial situation at the analyzed company including its ability to generate profits in the near future. In the course of due diligence, various financial aspects of the business are appraised, i.e. assets and liabilities, revenue and costs, receivables and payables, bank debts, financial controls and planning system, integrity of the management information and quality of reporting.
Due diligence process highlights unusual and non-recurring business transactions, and analyses intercompany transfers and their impact on financial performance. Particular attention is given to cash flows and liquidity of the current operations, as well as other various factors impacting the cash-generation capacity of a company at present and in the near future.
Business entities require Financial Due Diligence in the following cases:
- Acquisition of a significant stake in an entity
- Merger of entities
- Disposal of an Asset
- Sale of a significant stake in an entity
- Conflicts or disputes between partners or shareholders
Added Value to business entities from Financial Due Diligence
- Allows a buyer to identify flaws in the financial statements of prospective sellers.
- Identifies potential deal issues for the buyer to develop appropriate negotiation strategies.
- Minimizes the buyer’s likelihood of having surprises once the deal is finalized with the seller.
Services provided by Baker Tilly
Baker Tilly provides all aspects of Financial Due Diligence including, but not limited to the following:
- Assessment of Quality of Earnings
- Assessment of Quality of Assets
- Assessment of Quality of Cash flow
- Assessment of the business plan and financial projections
- Assessment of Inventory
- Assessment of Financial Provisions
Other related services
- Strategy and Business Plan
- Feasibility Study
- Business Valuation
- Financial Restructuring
- Mergers and Acquisitions
- Preparing Private Placement Memorandum
- Public Offering Prospectus
- Listing Advisory Services
- PPP Transaction Advisory
- Market Maker Advisory
- Collective Investment Schemes Advisory
- Advisory Services for practicing Securities