Due diligence implies investment appraisal by assessing key risks in a potentially investee business and the contributory factors that derive profits and cash flows.
Investee can be a complete business or a segment, an asset or group of assets, identifiable organized part of a business, shares in the business, which is termed as business, assets or shares acquisition and mergers.
Why it is necessary to conduct Due Diligence?
Due to the complex nature of merger and acquisition transactions, it is difficult for an investor to understand how the effect of business synergy or significant investment in investee shares can be add value for an investor, thus it is crucial to conduct detailed risk assessment and profitability/cash flow analysis of an investee business, to determine the effect of synergy or Return on Investment (ROI).
Key analysis factors for Due Diligence:
- Control environment and Management Information System (MIS)
- Financial and operational risk
- Human resource concerns
- Financial indicators
- Earnings, including usual earnings and by considering one-off events.
- Financial projections and ROI
- Working capital
- Long and short-term profitability/cash flow
- Liquidity and solvency
- ROI and service/product delivery turnaround time compare to leading competing businesses.
- Capital commitments and contingent liabilities
- Legal & regulatory issues and requirements
How we stand out as an Investment Appraisers
We understand that the due diligence studies require a consortium of professionals with technical knowledge and experience in financial analysis, market study, technical analysis and governance skills; hence, we have multiskilled and multidisciplinary team with required expertise to conduct due diligence engagements that meet our client's requirements through our quality due diligence reports.
We conduct thorough analysis of the key financial, technical, management and economic factors and translate our all-rounded complex analysis in easily comprehend-able Due Diligence reports that includes our recommendations for clients to make well-informed investment decisions.
