What might I be missing if I do my own DD?

by a searcher from The University of Arizona - Eller College of Management

5 months ago

Hello,

I'm looking at a business that has  high ticket value sales.  It is a 9 million in revenue business but only about 60 total sales.  I'm not sure I really need to pay a ton for doing the DD for the accounting on this deal since I've got a pretty strong background in this (MBA, business undergrad degree - 8 accounting courses taken, former SB owner that did all the accounting).  Just want to understand what pit falls I might be missing if I decide to do my own DD.

1 like
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61 comments

searcher from Fordham University - Gabelli School of Business

I totally agree on the above comment. Financial Analysis is a must

4 months ago | like reply | 0 likes

professional from American University

Even if you are well-versed enough to handle your accounting due diligence, you still would want to have an attorney assist with the legal due diligence to make sure that everything is reviewed and compared against the schedules in your agreement. Another thing to consider is, if you are planning to bring in any lenders or investors to help fund the acquisition, in my experience they prefer an outside third party to provide Quality of Earnings reports and other accounting due diligence, so that there is a backstop to the risk of missing something.

4 months ago | like reply | 0 likes

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