Budget for Financial due diligence for a under 5 million dollar acquisition

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by a searcher
in Austin, TX, USA

2yrs ago

Budget for Financial due diligence for a under 5 million dollar acquisition

How much do you Budget for Financial due diligence for an under 5 million dollar acquisition?

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959 Views

reply by an intermediary 2yrs ago
from The University of Chicago in Chicago, IL, USA

Cost of QoE depends on the scope (for example, is it just earnings or also customer, supplier, product, channel, analysis?). Typical QoE gives 1 year verification. Buyer needs to get comfortable with longer past performance. Before engaging a QoE expert, a buyer should analyze 5 yrs. of PL and BS, do operational DD, understand accounting practices, understand the business model and study monthly financials for at least one full FY.
Happy to chat. Just helped today another searcher for an hour. No strings.

reply by an investor 2yrs ago
from Universidad Politécnica de Madrid in Madrid, España

I agree with you! The smaller companies are the ones that hide more issues. Financials are more than the P&L or QoE. There could also be unrecorded liabilities and debt-like items that should be considered, together with a proper analysis of NWC.