The process to investigate or examine other person or business before making a contract to avoid future surprise is termed as due diligence.
In the process of any business acquisition or merger, buyer and seller make sure that all the financial information exchanged, should be verified and accurate. Sometimes it may be a legal obligation but besides legal obligation, the buyers always want to make sure to pay only for the market price of the business and not more. A good due diligence team ensures all the above concerns along with providing help in recognizing possible risks and opportunities associated with the business.
A good due diligence team can help you in achieving the following objectives:
- Verifying and confirming the actual position of business and what it appears to be.
- Verifying and confirming that all the transactions are in accordance with investment or acquisition criteria.
- Gaining all the information helpful in making an investment decision.
- Conduct a SWOT analysis to identify business strengths and weaknesses.