Our Due Diligence report and support will enable you to establish the quality of the target’s financials, identify risks, plug gaps and in essence do the background work for your intelligence gathering process. We can also help in preparing financial models using the target’s accounts, budgets, forecasts and then take into consideration your own funding plans and other integration strategies. We know that at this stage, you will need an extra pair of eyes and a credible sounding board, and we will be exactly that, bringing instant credibility to the situation. We know what you should be looking for.
We will help you understand your financial obligations, and highlight warning flags that may be missed if under pressure or working alone. The due diligence report is only one part of the puzzle, we will help you at any stage from pre-acquisition to many years post-acquisition.
What is the report?
This comprehensive investigation provides a fully detailed report on all major aspects of the company providing potential investors, funders and non-execs with information that will enable the validation of stated management systems, as well as reveal potential pitfalls or missed opportunities of any proposed plans.
The report will include a list of key findings and valid recommendations, as well as a reasoned conclusion with a financial analysis explaining the feasibility of our recommendations, and its impact on the company.
What will the report include?
- Review of financial details: Analysis of fixed assets, stock & WIP, trade debtors, bank and cash balances, prepayments, other debtors, HP/leases, loans, other creditors, accruals & deferred income, accounting policies, social security & VAT, corporation tax, intellectual property, goodwill and research & development.
- Review of corporate structure: Share capital, capital reserves, revenue reserves, long term loans, director’s loans, dividend policies, investments and group trading.
- Employees: Key staff personnel, staff turnover, salaries, employee incentives, benefit and welfare policies, holiday and sick leave policies, contracts, major disputes, cost/revenue per employee and training & development.
- Debtor and creditor details: Total sales and purchase ledger, debtor concentration, bargaining power of suppliers and customers, supplier and client switching costs and ageing debts & recoverability issues.
- Financing details: Current bank overdraft, approved facilities, bank loan/mortgage, HP accounts, lease accounts, monies on deposit and other loans.
Operational tax matters: Up to date PAYE, VAT, corporation tax, share option reporting and details of recent or pending investigations.
- Cash issues: Calculation of working capital requirements, treasury management, foreign exchange matters, managing interest exposure, covenant reporting, online payments and merchant account services.
- Forecasts: Historic trends vs. Forecast to support trading, consistency of forecasts, accuracy of forecasts and sensitivity & suitability of assumptions.
- Operations: Business profitability, overhead review, optimal finance department structure, control of business expenses, growth plans and exit plans.
- Strategy: Corporate strategy and mission, business strategy and functional strategy.
- Other considerations: Default retirement age, auto enrolment, minimum wage, NIC on salary costs, VAT recovery, credit rating, cross border issues and outsourcing issues.