Conducting financial due diligence is standard practice in today’s deal market. The typical scope of due diligence entails an in-depth review of financial statements and related components. While this approach is useful in providing a clear picture of summary-level historical performance, it will often fall short of painting the entire picture.
Failing to uncover significant operating and financial performance drivers can put a deal and investors at risk. This simply is unacceptable in today’s data-rich world. With all the data that is being collected, buyers and sellers alike are now able to drill down deeper on key business drivers. Some savvy dealmakers are opting to expand their diligence scope by performing an in-depth assessment of customers, product revenue, and corresponding profitability, in tandem with their standard due diligence.