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Due diligence is research into and examination of the background and financial
condition, business operations and contractual obligations of a person or
enterprise. It is done to establish a complete, accurate and reliable vision of
the subject so that realistic, fact-based decisions can be made by another
entity considering investment, business relationship, acquisition or
litigation.
What to include in business due
diligence reports
1,Company
Profile
Basic
background information—including history, operations, reputation, number of
employees, contact information, ticker symbol, names of top executives, top
competitors, overview of financials, and any recent news stories and company
press releases.
2.Industry
Profile
To help
understand the industry of the company for which you are conducting due
diligence.
3.Financial
Statements
Directly
from the company or from a third-party financial analyst.
4.Annual
Reports
Glossy
report produced for shareholders containing information about operations,
overview of financials, officers and directors, etc. Distinguished from the 10K
filed with the SEC.
5.SEC
Filings
What Steps to follow in business
due diligence reports
1.Collect
all board meeting minutes, contracts and financial documents for the most
recent five-year period. Include all contracts for facilities, equipment,
employees, suppliers, distributors and customers. Gather financial records
including bank statements, loans, leases, tax returns and any legal
liabilities. Also assemble any SEC documents pertaining to private or public
offerings of stock, annual reports and other disclosure documents. If there are
contracts or other important information stemming from beyond the five previous
years, include them.
2.Start
the due diligence report with a written profile of the company, its business
model, revenue model, customer base, operations model, management bios and
board activities. Write an overview of the industry and how the company fits
into it, the company's comparative financial strength and how it stacks up
against its competitors.
3. List
the company's top customers and evaluate the past, present and likely future
business relationship with these customers. Also do the same with the
suppliers, distributors, affiliates and strategic partners.
4.
Evaluate the company's contracts and leases with respect to their quality,
length of time to expiration and potential for renewal. Request audited
financials or bring in your own audit team. Analyze the company's financial
strength and its ability to maintain or grow the enterprise in coming years.
5.
Examine all SEC records if the company has sold securities privately or through
a public offering. Value the stock if private or include price and volume
charts if the stock is public. Include all insider transactions, a list of all
bondholders, stockholders, warrant holders and option holders.
Useful Tips for making business
due diligence reports
1.Write
for the target audience.
2. Focus
on the report objectives.
3. Limit
the report to information that has material impact to your company.
4.
Structure the information to be used as valuable reference material later
Contact
us
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you have further queries, please contact Tannet
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hours Malaysia hotline：603-21418908;
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hours Hong Kong hotline：852-27837818;
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hours Hong Kong hotline：86-755-
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