Financial Due Diligence

What is Financial Due Diligence?

Financial Due Diligence (FDD) is an in-depth analysis of a target company’s financial health, reported performance, and earnings sustainability. It is typically conducted during mergers, acquisitions, investments, or financing transactions to uncover hidden liabilities, cash flow constraints, accounting irregularities, and other financial risks that may impact deal success.

This process provides investors, buyers, lenders, and stakeholders with clear insights into the true financial standing of a business before committing resources.

✅ Our Financial Due Diligence Services Include:

1. Financial Statement Analysis

• Detailed review of:

  • Profit & Loss Statements

  • Balance Sheets

  • Cash Flow Statements

• Validation of:

  • Accounting policies

  • Adherence to IND AS / IFRS / GAAP

2. Quality of Earnings (QoE) Assessment

• Distinguishing recurring vs. non-recurring income and expenses

• Examination of:

  • Revenue recognition methods

  • Cost allocation practices

• Adjustment for normalized earnings

3. Working Capital and Cash Flow Review

• Evaluation of:

  • Receivables and payables

  • Inventory levels

  • Liquidity and solvency

• Analysis of:

  • Cash generation capability

  • Funding requirements and efficiency

4. Verification of Assets and Liabilities

• Cross-verification of:

  • Fixed assets and intangible assets

  • Investments and valuations

• Scrutiny of:

  • Outstanding debts

  • Contingent liabilities

  • Off-balance sheet exposures

5. Tax Compliance Review

• Review of:

  • Direct and indirect tax filings

  • Pending tax disputes and litigation

  • Tax planning and exposure risks

• Assessment of:

  • Statutory compliance and tax optimization

6. Identification of Financial & Operational Risks

• Detection of:

  • Financial reporting inconsistencies

  • Fraud risks and control weaknesses

• Assessment of:

  • Internal financial systems

  • Business continuity risks