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Financial Due Diligence

Financial due diligence is an integral part of every company acquisition and the basis for the associated determination of the company value or purchase price. It thoroughly examines the financial data of the company to be acquired and thus identifies potential financial risks arising from the transaction.

Financial Corporate Analysis with Financial Due Diligence

The time pressure for the analysis of a company prior to an acquisition or a merger is high, as are the expectations for the required due diligence. The financial due diligence includes an assessment of past, effective data, and plan figures such as balance sheet, income statement and cash flows, as well as evaluation of the structure of the personnel, order volume, or the customer base. In this process, the net assets, financial position, and results of operations at a target company are analyzed on the basis of external and internal metrics for the company. However, financial due diligence must be clearly differentiated from a review such as an audit of the financial statements or a company valuation since due diligence very specifically generates information relevant for the principal.

Objective of Financial Due Diligence for Company Acquisitions

As part of our services, we calculate, for example, normalized earnings, net debt, and identify significant financial risks and impacts on key metrics. Of course we rapidly prepare a report on current questions, potential deal breakers, and recommendations for purchase price clauses or guarantees.

The following input may be relevant for this:

  • Sustainable, adjusted earnings
  • Sales and earnings growth
  • Net debt, including unreported circumstances
  • Cash flow planning
  • Change in working capital
  • Investment activity

Buy Side Financial Due Diligence

In Buy Side Financial Due Diligence we support you as a buyer in identifying financial opportunities and risks of the pending transaction, but also in a later phase after closing.

Sell Side Financial Due Diligence

In all things, success depends on preparation - also or especially in the case of a company sale, which entails a certain amount of due diligence. Through structured and detailed preparatory work within the framework of a sell side financial due diligence, the sale of a company can be realized in the shortest possible time and at the best possible price. We support you here in the preparation of the sales documents (Financial Factbook) or also in a Vendor Financial Due Diligence and provide you as management with the necessary overview in this respect.

Financial Due Diligence Consulting – a Service Provided by FAS AG

M&A processes are all about speed! We discuss the process and scope of financial due diligence with you before the start of the project and recommend specific areas of investigation based on our industry experience. Taking into account the client's needs in terms of budget and costs during the transaction, we develop an individual price offer consisting of a Red Flag Report and Full Financial Due Diligence based on a modular approach.

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 Dirk Spalthoff Member of the Board/Partner