Due diligence | Censor M&A
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Due Diligence - company audits

Whether you are selling or buying a company, a company audit a.k.a. due diligence, is a key activity. Carrying out this activity basically verifies the perception you have of the target company. Is the underlying basis from which you created your perceived value of the company correct? A thorough investigation is usually carried out in connection with financial, legal and commercial issues.

The overall purpose of a due diligence is to:

  • Discover any flaws and/or possible errors from a legal and financial perspective
  • Analyze the company’s operational ability and risk profile
  • Analyze the company’s future potential and any possible investment needs
  • Find and explore areas that can be developed
  • Evaluate the degree of orderliness
  • Identify possible synergies that can be implemented after a transaction
  • Create the basis for a business plan
  • Verify an indicative valuation of the company

Should you decide to sell a company, it is absolutely essential that you prepare and quality- assure any information materials a buyer wishes to review. Should you decide to acquire a company, your review of the company is central in verifying that the indicative bid is based on a correct opinion about the company.

In addition to the actual review process, a due diligence is about analyzing the company and creating an idea of how a buyer can influence and develop the company’s ability to make money. In this analysis, it is important to focus on what can affect the company, both positively and negatively, after a change of ownership.