Due diligence
Due diligence is an in-depth investigation of the target company´s financial, tax, legal, commercial, IT, operational and strategic matters. Financial due diligence (FDD) is an investigative analysis of the financial performance of a company, i.e. analysis/determination of the normal (standard, operating) level of sales, profitability, working capital, net debt, capital investments and cash flows of the target company over the period under review (usually three completed financial years, plus the available period of the current financial year). It uses previous business experience to form an opinion on the future, and minimises the likelihood of unpredictable situations and “black holes”.
The due diligence process can be carried out for the buyer, or for the seller (vendor due diligence). If a company or a part of a company is for sale, it needs to show its potential buyers an in-depth report on its financial health. PwC can satisfy the requirements of both parties, the buyer and the seller, via an independent view of the company, which also includes an opinion on its performance and future prospects. The aim of vendor due diligence is to highlight and bring attention to concerns and issues of relevance to buyers.
