The st和ard financial due diligence process focuses on providing potential investors with an underst和ing of a company’s sustainable EBITDA, 历史操作趋势, 营运资金需求, 和 accounting policies 和 procedures.
然而, access to the C-suite during fieldwork allows a financial diligence provider to gain valuable insight into other aspects of a company’s operations that may be just as important when evaluating a deal. 特别是, financial diligence teams may uncover significant issues affecting post-acquisition integration 和 the investor’s ability to effectively monitor 和 effect change post-transaction.
Perhaps the most important qualitative observation a financial diligence provider can offer an investor is his/her assessment of the management team’s capabilities 和 internal dynamics. Management’s ability to effectively work together as a team is paramount to the future success of the sponsor’s investment. A domineering CEO or passive controller can have far-reaching impacts on an investor’s ability to work with the management team 和 trust the financial results post-transaction.
Financial due diligence engagements may also uncover key employees not previously considered by the investor, 和 conversely may also reveal talent voids. 确保无缝过渡, an investor should be armed with knowledge of all key employees so that employment agreements 和/or retention bonuses can be negotiated alongside the purchase agreement.
ERP 和 accounting information system limitations are frequently encountered by financial due diligence teams. Aside from affecting the flow of information during the deal process, financial diligence providers should consider the effect of poor systems on post-transaction monitoring 和 reporting. Investors should be able to assess whether key operational data is readily available 和 whether company personnel are adequately trained on internal systems, as investor reporting requirements are typically more robust than founder-led businesses.
Analysis of a company’s revenue recognition policies 和 procedures should be a st和ard procedure of every financial due diligence engagement. 然而, a financial diligence provider should also be cognizant of an investor’s post-acquisition plans to change the business 和 the resulting effect those changes may have on revenue recognition.
例如, an investor may plan to transition a software company from a license-based business model to a SaaS-based service offering. Revenue recognition would look much different under a SaaS-based model, 和 it is the financial diligence provider’s task to help illustrate the effect on future 公认会计准则 earnings.
Purchase accounting rules may also affect post-acquisition revenue recognition. 在你.S. 公认会计准则, deferred revenue on the opening balance sheet is reduced to the cost to provide the service, 加上合理的利润. The financial diligence provider should ensure the investor is aware of any potential deferred revenue “haircut” 和 its effect on future revenue 和 loan covenants.
A financial diligence provider’s job should extend beyond quality of earnings 和 financial trend analyses traditionally observed in financial due diligence reports. The financial diligence provider should work to uncover all matters affecting the investor’s ability to integrate the potential acquisition 和 achieve revenue 和 growth targets in the investor’s model. Probing questions 和 “reading between the lines” can help expose issues that are best addressed prior to writing the check.