The ultimate goal of all due diligence whether you are a first-time or experienced investor is to validate the assumptions made in determining to go ahead with your investment. Quite simply put, are you buying what you think you are buying Key questions to be addressed in the financial due diligence include
- How has the target company really performed in the past and what are its true earnings prospects
- Does the company have cash flow adequate to support its growth and day-to-day needs
- What's not being reported on the balance sheet and are there any skeletons in the closet that result in contingent liabilities
Getting to the bottom of these questions...