Due Diligence

Why a Due Diligence?

I developed expertise in conducting professional Due Diligence connected with a wide variety of situations.

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The true “Due Diligence” is a process whereby an investor seeks sufficient information about a business entity to reach an informed judgment as to its value for a specific purpose.

A Due Diligence can also be performed in a wide variety of other situations such as:

  •  A Firm considering a potential acquisition
  • An Investment Banker considering underwriting a public security offering or promoting a Private Placement
  • A Banker considering the making of a loan
  • A Lawyer preparing an offering statement or a merger proposal for a client
  • An Appraiser who has been retained to estimate the value of a business unit
  • A Business Broker offering a company for sale
  • A Public Accounting Firm in conjunction with an audit performed at the request of a potential buyer or in support of a security offering
  • A Security Analyst preparing a buy, hold or sell recommendation on a public security

 

The Due Diligence investigation is normally carried out with the knowledge and cooperation of the management of the entity being investigated.
We can be mandated to execute a Due Diligence, either to realize an in-house transaction or be appointed by a third party in connection with the situations above-mentioned and/or other situations, without being limited to, the following activities of the subject entity:

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The Due diligence process

  • Overview of entity
  • Capitalization and ownership
  • Organization and management
  • Relationships with outside organizations
  • Description of products and/or services
  • Revenues and market share
  • Marketing operations
  • Customer service
  • Inventory control and purchasing
  • Production
  • Physical distribution
  • Computer, communications and information systems
  • Financial management
  • Legal affairs and litigation
  • Security and safety
  • Human resources
  • Public relations
  • Corporate development
  • Description of fixed assets

o    Land and buildings

o    Vehicles, equipment and tooling

  • Introduction to financial analysis

o    Balance sheet analysis

o    Current assets

o    Non-current assets

o    Liabilities

o    Net worth

  • Income statement analysis

o    Revenues

o    Cost of goods sold and gross margin

o    Operating expenses

o    Operating income

o    Non-operating and nonrecurring items

o    Income taxes

o    Net income

o    Capital expenditures

o    Cash flow

o    Financial ratio analysis

o    Income statement projections

o    Balance sheet projections

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NOTE: In most of the cases there are very sensitive informations to be searched for a good and total expertise. Is like the story of the little girl with the red scarfe: The forest is there, The girl is there, The old grandmam house is there, The hunter is there … Where is the wolf? and who really eat the little girl food…. We can find the wolf and who eat the food!