[CHEE KOK SENG]

Why financial due diligence is important?

[Majed Faraj]

Financial due diligence provides valuable information to support a fair purchase price and ensures the appropriate warranties and representations are included in the purchase agreement. It also identifies the issues the purchaser and vendor should address to complete a successful transaction.

[Charles Ladas]

Financial DD is important because a company’s financials help a buyer determine whether a target is viable from both a financial and business standpoint.

[Raid Almutairi]

In addition to what has been mentioned above by other participants, FDD is important for both buyer and seller as it will be the ground basis for the negotiation process or phase.

[Mohammad Alageeli]

I would say FDD gives you an idea if the deal would add value to the buyer

[Sumit Rambani]

Financial DD is one of the very first areas where buyers would like to investigate whether the financial numbers which have been presented are fair or not.

[Ameera Alhawaj]

Financial due diligence is vital in mergers and acquisitions in that it offers the buying entity with an insight of the inner operations/workings of the target entity. The purchasing entity the financial position of the target firm, decipher the aspects not recorded in the financial statements as well as uncover such aspects as the unreported liabilities, potential risks, problematic contracts among other aspects. Other vital aspects that the buying firm will uncover include intellectual property issues, customer base as well as the target firm’s strategic fit to the purchasing company business line. Through this analysis, the buying firm can then determine whether or not to purchase the target and if they do so at which price.

[Shuvam Koley]

When done properly, financial due diligence provides valuable information to support a fair purchase price and ensures the appropriate warranties and representations are included in the purchase agreement

[Author]

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