At the heart of all of our analyses, we start by understanding our client’s objectives and investment thesis. We tailor our approach to each due diligence assignment and stay focused on the relevant issues.
Assess the Quality of Earnings
We scrub the target's reported earnings to identify the non-operating, non-recurring, prior period, run-rate and non-GAAP items as well as errors and other situations where reported earnings do not appropriately represent the underlying economics. We help bridge the gap between reported earnings and ongoing, sustainable earnings.
Determine the Strength and Fairness of the Reported Balance Sheet
The balance sheet is a “snapshot” of a company’s financial position at a particular point in time. We zero in on mis-valued or unreported assets and liabilities.
Prepare a Normalized Working Capital Analysis
Going beyond the simple calculation of current assets less current liabilities, we normalize working capital and take into account various items to more accurately reflect the working capital required to deliver the earnings our client is acquiring. Normalizing working capital is a key task as the negotiated target directly impacts the economics of a transaction.
Validate Assumptions Underlying Cash Flow and Financial Projections
With financial modeling comes assumptions and projections. We help validate key assumptions, giving early priority to potential deal killers, and help bridge historical and forecast operating results from an unbiased vantage point.
Analyze the Integrity and Strength of Internal Controls and Operating Procedures
As we perform our due diligence and meet with the target company’s management, we gain an understanding of the financial operating and control procedures within that business. We assess the strength and integrity of those procedures to highlight any concerns or potential risks.
Evaluate the Adequacy of Accounting and Financial Staff
We offer a candid view of the strengths and capabilities of the accounting and financial staff.
Identify Other Issues Affecting Valuation, Integration and Risks
With the breadth of our industry experience, our deep M&A experience, and the strong business acumen of our professionals, we identify additional issues affecting valuation and integration, as well as overall risks.
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