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Due Diligence: Advantages of Due Diligence Services

Updated:2017-12-20 14:21:03    Source:www.tannet-group.comViews:132

Due Diligence is the type reviewing engagement service which is normally performed the investigation to the target business, or companies related to business performance, liabilities, assets, financial statements and others subject matters. Due Diligence service are vary depending on the nature of engagement. Due diligence is important for many reasons, but most importantly to make informed business decisions.

Benefits of Effective Due Diligence for Investors
The goal of due diligence is to discover hidden information about a business. Performing an effective due diligence will take time, resources and money. It’s certainly true that due diligence needs to be performed because some business owners intentionally hide information about a business they’re trying to sell.

Due diligence is also a tool that an investor can use to discover other vital information about a business. Suppose the investor is trying to discover whether the business fits into their strategic plan. No intentional fraud involved there. Due diligence is an opportunity for the investor to do their homework by assessing how well the business fits in with their current operations.

Two Common Types of Due Diligence
1. Financial Due Diligence
Normally when one company is targeted to be acquired by the the potential investors or potential purchasing companies, the accurate value of that targeting company is the most concern. Financial Due Diligence answer investigators this question and set this answer as the primary objective of such kind engagements. The main financial situations from the past few years to next few subsequent years will be critically assess and analysis.

Financial Due Diligence will not only assess and identify the assets and liabilities of the company, but also provide the technical recommendation of cost saving to the potential investors, future cash flow analytic.

2. Legal Due Diligence
Legal due diligence is an investigation into a business by re viewing documents and interviewing employees. A legal due diligence investigation is completed when a business or investor is interested in buying a business or investing in that business.

A legal due diligence investigation is seeking information about the business to make sure that the investment or purchase is beneficial. The investigation seeks to reveal all important facts and potential liabilities. Once the facts are collected and analyzed, an informed decision can be made.

There are subcategories of legal due diligence. These subcategories seek more specific pieces of information.
Intellectual property due diligence;
Business due diligence;
Accounting due diligence.

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