Due diligence states to the method of research and analysis which is done in advance to an acquirement, investment, business partnership or any proposed credit for determining the value of the subject any analysing any major issues or potential risk associated.
Due diligence is majorly performed by companies which seeks for acquisitions, equity research analysts, and investors.
Ken Research conducts the due diligence by being unbiased and generating value to the due diligence reports and business analyses for clients, enabling them on taking the sound decision-making and negotiation processes. We also offer a trustworthy, balanced perspective which act as ideal supplement to the client’s internal resources.
We focus on offering the value-added services that increases the client business decisions bonding them to recognise technologies, logistics, corporate strategy and finance with ability to précis the difficult issues into concise, easy agreed terms.
Ken Research’s due diligence review deliverables aims to undoubtedly bring due diligence review reports, outcome of engagement maintained by conclusions in each area along with all the proposed adjustments for achieving the objectives.
Need for a Due Diligence report:-
The Due Diligence report aids in understanding how the company campaigns to generate additional earnings. It also obliges as a ready reckoner for understanding the affairs at the time of purchase/sale, etc. Reports further confirms the information collected during such process is crucial for decision making and thus further needs to be reported in structured manner. Due diligence serves the ultimate purpose in getting a clear picture of how businesses will perform over the forecast period.
Financial due diligence:-
Ken Research’s in a financial due diligence report analyses evaluates proposed deal by taking a clear understanding of present and historical financial statements along with other important agreements reviewing the control environment and assessing the incidental risk to the business.
Some of the key steps that financial due diligence are document reviewing, discussion and interviews with key official management, comparison of historical financial data & trend analysis, and finally reporting of financial and tax risks along with actual operational situation of the targeted firms. Moreover, while analyzing numbers, income statement including company’s revenue or the top line, net income or profit. It’s also important to monitor key trends in a company’s revenue, operating expenses, profit margins, and return on equity. It’s best to analyse profit margin over several quarters or years and compare those results to companies within the same industry to gain perspective. Profit margin is calculated by dividing the company’s net income by revenue.
Following are the key steps taken for undertaking a financial due diligence.
Reviewing -A through appraisal of financial statements and other financial documents, identifying critical information.
Analytical procedures – This includes actions such as performance analysis, trend analysis, structural analysis etc. It also includes analysis of materials acquired through all channels then ordering the results of analysis determining abnormalities and important issues.
Interview – The sufficient communication to every level of internal chain of command, employees of different positions and roles, as well as intermediary institutions.
Internal communication – Sharing of work outcomes makes an effective in accomplishing investigative targets.
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Ankur Gupta, Head Marketing & Communications