M&A - Financial Due Diligence
The ultimate goal of an M&A transaction is to determine the fair value of a business to be acquired. Financial due diligence is a critical step in investigating financial health of a company with a view to empower buyers to make an informed decision. Financial due diligence entails the investigation of the financial health of the company by meticulously scrutinizing their historical and current financial statements to ascertain their future forecasts and identify any potential risks not readily apparent in the financial statements for the buyer’s perusal, often advising remedial measures to avoid future regulatory or cost implications. There are, in the normal course of business, two types of M&A transactions: 1) Buy-side – The aim of financial due diligence from a buyer’s perspective is to determine the robustness of the target’s financial health and its prospects as you’d want it to be. It is perhaps the first step to a peaceful M&A transaction journey for the b...