Often purchase agreements are dependent on such an investigation before finalisation of the agreement. This is the process by which the investor is satisfied that they are purchasing what they have been presented with.
A comprehensive due diligence report will place the owner or buyer in a position of power to fully understand the standing of a company and its true worth for both existing companies as well as acquisitions.
Given the amounts of money involved with business purchases it is important to perform comprehensive and open investigations. You can place your future investment at risk when not performing comprehensive assurance of the financial facts and figures surrounding the entity.
- Financial Due Diligence
Carampako Due Diligence services
The most important type of due diligence is the financial due diligence that seeks to check whether the financials showcased are accurate or not.
Financial Due Diligence aims to provide a thorough understanding of all the company’s financials, including audited financial statements for the last three to five years.
Unaudited financial statements will be compared with statements of the last year, and the company’s projections, capital expenditure plan, schedule of inventory, debtors and creditors will be examined.
The financial due diligence process also involves analysis of fixed and variable costs analysis of profit margins, examination of internal control procedures and customer accounts.
Due diligence can also incorporate an examination that is focused on short-term and long-term debt, applicable interest rates, the company’s ability to service its outstanding debt and an overall evaluation of the company’s capital structure.
Carampako develops due diligence reports for existing companies as well as acquisitions. A comprehensive due diligence report will place the owner or buyer in a position of power to fully understand the standing of a company and its true worth.
There are other types of external audits targeted at specific issues concerning a client’s accounting records and business practices e.g:
- Compliance Audits (e.g. regulatory and tax)
- Performance Audits
- Fraud detection
- Business practice (e.g. governance and compliance)