Financial Due Diligence & Advisory Services
Understanding the Financials Behind the Business
Financial due diligence is commonly relevant to acquirers and investors assessing a target business, owners preparing for a sale, and corporate teams evaluating acquisitions, divestments or strategic investments. The review is tailored to the questions that matter to the transaction and the information available.
BEYOND THE REPORTED NUMBERS
Understand the financial position. Identify what matters.
A STRUCTURED APPROACH TO FINANCIAL DUE DILIGENCE & ADVISORY
Financial information can reveal important insights about a business’s performance, sustainability and financial risks. A structured review helps stakeholders examine the underlying numbers, understand significant movements and identify matters that may require further attention.
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Financial due diligence and advisory may support acquisitions, investments, business sales, transaction negotiations and other corporate decisions, with the scope tailored to the purpose of the engagement and information available.
TRANSACTION REQUIREMENTS
When Is Financial Due Diligence Required?
Financial due diligence may be valuable when stakeholders need a clearer understanding of a business’s financial performance, underlying earnings, cash flows and financial obligations before making a significant decision. The scope depends on the transaction, the questions being examined and the information available.
ACQUISITIONS & MERGERS
Reviewing relevant financial information to understand the business being acquired, its financial position and matters that may affect the proposed transaction.
TRANSACTION NEGOTIATIONS
Examining relevant financial findings that may inform discussions around transaction terms, valuation considerations and the proposed deal.
INVESTMENT DECISIONS
Assessing financial performance, earnings sustainability and relevant financial risks to support an informed investment evaluation.
EARNINGS & CASH FLOW REVIEW
Understanding earnings quality, cash flow patterns, working capital and other financial measures relevant to the business and transaction.
​BUSINESS SALES & DIVESTMENTS
Preparing for a transaction through a structured review of financial information and identifying matters that may require clarification before a sale.
​DEBT & FINANCIAL OBLIGATIONS
Reviewing relevant debt, liabilities and financial commitments to help stakeholders understand the business’s financial obligations within the agreed scope.
Look Beyond the Numbers to Understand the Business.
A structured review of financial performance, earnings, cash flows and obligations can help stakeholders identify important considerations before making transaction decisions.
Our Approach.
A Structured Approach to Financial Due Diligence
Every transaction raises different financial questions. Our approach is shaped by the purpose of the engagement, the nature of the business, the information available and the matters relevant to the stakeholders involved.
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DEFINE
REVIEW
ANALYSE
IDENTIFY
REPORT
Establish the Scope
Examine Financial Information
Assess Key Financial Drivers
Understand Key Findings
Communicate the Findings
Understand the transaction, objectives, relevant financial questions and scope of the due diligence engagement.
Review relevant financial statements, management information and supporting records to understand historical financial performance and position.
Examine earnings quality, cash flows, working capital, debt and other financial considerations relevant to the assignment.
Identify significant financial movements, potential risks, information gaps and matters that may require further investigation or clarification.
Present the analysis, key observations and relevant financial considerations in a structured report appropriate to the agreed scope and purpose.
FINANCIAL DUE DILIGENCE CONSIDERATIONS
Key Areas Examined in Financial Due Diligence
A financial due diligence review examines the financial information most relevant to the business and proposed transaction. The areas covered depend on the engagement's scope, the nature of the business and the information available.
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QUALITY OF EARNINGS
Examining reported earnings, significant adjustments, unusual items and underlying operating performance to understand the sustainability of earnings.
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CASH FLOW & WORKING CAPITAL
Assessing cash generation, working capital movements and operating cash flow patterns relevant to the transaction.
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FINANCIAL TRENDS & PROJECTIONS
Examining historical financial trends, management forecasts and the assumptions underpinning projected business performance, where applicable.
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REVENUE & PROFITABILITY
Reviewing revenue trends, profit margins, major revenue drivers and significant changes in financial performance.
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DEBT & LIABILITIES
Reviewing relevant borrowings, financial obligations, contingent liabilities and other debt-related considerations within the agreed scope.
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FINANCIAL RISKS & EXCEPTIONS
Identifying unusual movements, inconsistencies, information gaps and other matters that may require clarification or further investigation.
Understand the Numbers Behind the Decision.
Examining earnings, cash flows, working capital, liabilities and other relevant financial information helps stakeholders develop a clearer view of the business before proceeding with a transaction.
DUE DILIGENCE DELIVERABLES
What a Financial Due Diligence Report Covers
A financial due diligence report presents relevant financial findings and observations in the context of the proposed transaction. The deliverables depend on the agreed scope, the purpose of the engagement and the information available.
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SCOPE & FINANCIAL OVERVIEW
An outline of the engagement, the financial information reviewed, the relevant periods and the key areas covered in the analysis.
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CASH FLOW, WORKING CAPITAL & DEBT
Relevant observations on cash generation, working capital, borrowings, liabilities and other financial considerations within the agreed scope.
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FINANCIAL PERFORMANCE & EARNINGS
An assessment of revenue, profitability, earnings quality and significant financial trends relevant to understanding business performance.
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KEY FINDINGS & OBSERVATIONS
A structured presentation of significant findings, identified risks, information gaps and matters that may require clarification or further consideration.
Clear Financial Findings. Better-Informed Decisions.
A structured report helps stakeholders understand the financial position of the business, evaluate relevant findings and consider their implications for the proposed transaction.