{"id":1855,"date":"2020-05-08T01:52:02","date_gmt":"2020-05-08T01:52:02","guid":{"rendered":"http:\/\/httpsht\/?p=1855"},"modified":"2021-03-09T13:29:58","modified_gmt":"2021-03-09T13:29:58","slug":"due-diligence-services","status":"publish","type":"post","link":"https:\/\/profinance.am\/hy\/archives\/1855","title":{"rendered":"Due Diligence Services"},"content":{"rendered":"
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

The process of due diligence is something that in the process of mergers and acquisitions the buyer conducts to confirm the accuracy of the seller\u2019s claims. A potential M&A deal involves several types of due diligence.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

\n\t\t\t\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t

Types of Due Diligence<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

The main types of due diligence inquiry are as follows:<\/p>\n

Administrative DD<\/strong><\/p>\n

Administrative DD is the aspect of due diligence that involves verifying\u00a0admin-related<\/a>\u00a0items such as facilities, occupancy rate, number of workstations, etc. The idea of doing due diligence is to verify the various facilities owned or occupied by the seller and determine whether all operational costs are captured in the\u00a0financials<\/a>\u00a0or not. Admin DD also gives a better picture of the kind of operational cost the buyer is likely to incur if they plan to pursue expansion of the target company.<\/p><\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

\n\t\t\t\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t

Financial DD<\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t

One of the most important types of due diligence is the financial due diligence that seeks to check whether the financials are accurate or not. Financial DD aims to provide a thorough understanding of all the company\u2019s financials, including, but not restricted to, audited financial statements for the last three years, recent unaudited financial statements with comparable statements of the last year, the company\u2019s projections and the basis of such projections, capital expenditure plan, schedule of\u00a0inventory<\/a>, debtors and creditors, etc.<\/p>\n

Asset DD<\/strong><\/p>\n

Another type of due diligence conducted is asset DD. Asset due diligence reports typically include a detailed schedule of fixed assets and their locations (if possible, physical verification should be done), all lease agreements for equipment, a schedule of sales and purchases of major capital equipment during the last three to five years, real estate deeds, mortgages, title policies, and use permits.<\/p>\n

Human Resources DD<\/strong><\/p>\n

Human resources due diligence is extensive. It may include all of the following:<\/p>\n