Financial due diligence helps a buyer understand the quality of earnings, cash flows, assets, liabilities and risks behind a proposed acquisition before committing capital.
Test the quality of earnings
Separate recurring trading performance from one-off income, unusual expenses and owner-specific items. Compare management accounts, statutory statements, tax records and bank activity where relevant.
Understand whether margins are sustainable and whether revenue depends heavily on a small number of customers.
Examine the balance sheet
Review receivables recoverability, inventory quality, fixed assets, debt, provisions, related-party balances and unrecorded obligations. Working-capital requirements can materially affect the economics of a transaction.
Connect findings to the deal
Due diligence findings may affect valuation, warranties, completion mechanisms or post-acquisition priorities. The objective is not merely to produce a risk list, but to help decision-makers understand the financial consequences.
How AS Chartered Accountants can help
Good financial governance is easier when accounting, tax, assurance and advisory work from the same reliable information. AS Chartered Accountants provides partner-led support designed around the realities of operating in Zimbabwe. Explore Corporate Finance & M&A Advisory, Tax Services and Business Advisory.
Contact AS Chartered Accountants to discuss your organisation’s requirements and the scope of support that may be appropriate.
