Due Diligence | KPMG | LU

Due Diligence

Due Diligence

Difficult business conditions put a premium on robust financial data and analysis in making important business decisions.

Difficult business conditions put a premium on robust financial data and analysis...

Financial due diligence and timely professional advice enhance the quality of decisions on significant business transactions.

Margins of error are thinner and investors and lenders are unforgiving of poor decision-making and execution. In these circumstances financial due diligence and timely professional advice enhance the quality of decisions on significant business transactions.

How we can help:

Using investigative analysis to assess the key issues facing a target business and the drivers of its historic and projected profits and cash flows:

Understanding the structure of the contemplated target

  • We summarise on the history of the target and describe the current shareholding and management pattern;
  • We describe the current product profile for key products;
  • We describe the key accounting policies in place

Identifying the business environment of the contemplated target

  • We assess the strengths and weaknesses (commercial and operational considerations) of the business against industry benchmarks;
  • We identify any tax and legal issues needing further specialist investigation

Performing a high level financial review and identify the potential deal breakers

  • We analyse the key drivers of underlying the historical financial performance and cash flows;
  • We investigate on the quality of earnings, and the sustainability of cash flows;
  • We comment on the forecasted financial performance and cash flows;
  • We perform an analysis of the main components of the balance sheet (including working capital requirements and net debt position);
  • We summarise on liabilities and off-balance sheet commitments

Identifying the impact of the transaction on the target business

  • We identify any arising people issues (key management, pensions, compensation, benefits);
  • We summarise on other separation costs (e.g. people, IT, central costs)

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