Blog

The Importance of Financial Due Diligence

August 11, 2023

Whether you’re an entrepreneur, investor, funder or a company looking to acquire, conducting thorough financial due diligence is an essential practice to confirm the financial information on which you have based your decision and constructed your offer.  It digs into the financial information to ensure your understanding of the numbers reflects the reality of the current position and any forecasts fairly present the likely future performance of the target.

This blog will shed light on the value of financial due diligence and why you should trust the highly skilled Hentons Corporate Finance team to support your transactions.

What is Financial Due Diligence?

Financial due diligence is a comprehensive investigation and analysis of a company’s historical and present financial records, performance, and future projections.

We thoroughly dissect financial statements, tax records, liabilities, bank statements, assets and more based on the client’s needs to evaluate the company’s overall financial health and stability, both historically and forecast.

The importance and benefits of an FDD include:

  • Determining any potential risks related to the target
  • Identifying issues that need addressing before a purchase agreement is signed
  • Recognising the true value of the target company
  • Lowering the risk of acquisition
  • Helping to make an informed investment decision
  • Uncovering disguised issues or opportunities
  • Facilitating negotiations and deal structuring
  • Mitigating legal and regulatory risks
  • Minimising legal fees

Hentons’ process of conducting an FDD:

Our team has a broad range of experience, outside of the professional service world, including roles in banking, industry, start-ups and their own transactions. The team prides itself on arriving at a commercial conclusion and sharing this with our clients, in a candid and succinct manner.

We can tailor the report based on the client’s needs and are flexible on how the client wants to approach the work. Our strapline is ‘Intelligent, Proactive and Candid’. These three words are important to us and how we deliver our services.

Why choose Hentons?

Don’t just take the word from us when you can read up on some of our success stories. The links below just show a small snapshot of the projects we have supported.

Success Story 1
Success Story 2
Success Story 3

Contact Us:

We have worked with several clients across different sectors, for more information contact Chris Sellars (chris.sellars@hentons.com) or Matt Milnes (matthew.milnes@hentons.com).

Terms and Conditions | Privacy Policy | Copyright Information | Official Information
© Copyright 2024 Hentons. All Rights Reserved.

Website design and build by Grey Matter | web design sheffield