Financial M&A Due Diligence

Three Objectives of Financial Due Diligence

  1. Ensure the target company is worth the price to be paid by the purchaser by confirming:
    • Actual earnings are consistent with seller representations
    • Future earnings expectations are reasonable
    • Hidden liabilities are unlikely to surface after the transaction
  2. Enable the purchaser to better understand the target company and develop more effective operational strategies resulting from:
    • More complete understanding of the business
    • Identification of “hidden treasures”
  3. Accomplish the items above in a timely and cost-effective manner


Slide titles:


Financial M&A Due Diligence
Financial M&A Due Diligence
The Heart of Business Value
The Heart of Business Value
Objectives of Financial Due Diligence
Objectives of Financial Due Diligence
Efficient Due Diligence
Efficient Due Diligence
Significant Risk Sources
Significant Risk Sources
Accuracy of Earnings and Cash Flow Representation
Accuracy of Earnings and Cash Flow Representation
Internal Controls & Weaknesses
Internal Controls & Weaknesses
Reconciling Earnings to Cash Flow
Reconciling Earnings to Cash Flow
Earnings Normalization
Earnings Normalization
More Clever Owner/Manager Misrepresentations
More Clever Owner/Manager Misrepresentations
Detecting Clever Owner/Manager Misrepresentations
Detecting Clever Owner/Manager Misrepresentations
Economic Ownership of Critical Intangible Assets
Economic Ownership of Critical Intangible Assets
Contact Information
Contact Information