Financial Due Diligence is an examination that assesses the financial state of a target company for business arrangements. This examination provides a comprehensive view of the target company’s financial situation, which helps in determining the correct value for a business acquisition or investment. The audit reduces commercial and operational risks for both parties in business arrangements.

Traditionally, the buyer and investor’s Financial Due Diligence process ensures that the target company’s finances match what was agreed upon. In Aamu Partners’ process, the future earning potential is also assured by delving into the business logic and processes and examining the reliability of financial forecasts. Aamu’s team has experience in over 150 successful business arrangements.

Often, the Financial Due Diligence process starts with the buyer’s intention, but a company seeking investment or sale can also initiate the Financial Due Diligence process. The aim here is to prepare the company for sale to attract as many potential buyers as possible. Read more:

About the Financial Due Diligence process ordered by the purchasing party

About the Financial Due Diligences process for a company up for sale

Financial Due Diligence & Investment Decision Validation

In the buyer’s Financial Due Diligence, the financial health of the acquisition target (company or business) is confirmed, and risk factors that may affect the contract’s content, the arrangement’s structure, purchase price, or post-acquisition integration are identified.

A More Comprehensive Approach Compared to Market Standard

Aamu Partners’ operational model is a more comprehensive ensemble than typical and traditional Financial Due Diligence examinations. You will receive clear recommendations to support investment decision-making, including risk analysis and the assessment of restructuring impacts. With Aamu Partners, you improve your negotiation position, understand the profitability drivers and value factors of the target, gain clarity on the biggest risks, and a perspective on the accuracy of the profit and loss and cash flow forecasts.
With years of experience and industry-independent consulting, we have advised companies (industrial actors and strategic buyers) in commercial business logic modeling, profitability driver determination, and financial modeling – our approach is consultative and always based on cash flow. Aamu Partners’ business logic description and financial analysis provide a clear picture of the business structure and its generated cash flow, challenges, and value to the owner.

What Does Aamu’s Financial Due Diligence Service Include?

Aamu Partners’ FDD process provides a thorough analysis of the company’s financial condition now and in the future.

• Comprehensive examination of the target’s finances
• Overall analysis of the target’s business logic and future prospects
• Clear summary report including action recommendations

What the Process Entails

When you are buying a company, you are buying its future earning potential. Therefore, Aamu Partners’ Financial Due Diligence service is not limited to just going through the existing accounting, but also unravels the business logic and forecasts. This gives you a reliable picture of the earning potential of your target.

• Overall financial picture: analysis of history and forecasts – profitability drivers, cash, cost, and balance sheet structure, and valuations
• Business logic: construction of cash flow and the most significant factors in areas like investments, financing, operational cash flow
• Sales forecasts: valuation of customers, order book, costs associated with customers, terms of sales invoicing
• Detailed profitability analysis: margins and efficiency
• Effects of restructuring: impact on costs and savings
• Net working capital and working capital cycle: inventory, accounts receivable, accounts payable
• General expenses and key financial processes, systems, and intellectual capital

If you would like to discuss this topic further, please contact us using the contact form at the bottom of the page.

What Can Aamu Partners Do to Facilitate the Sale?

Our clients have benefited from the following services:

• Calculating the company’s valuation and making suggestions for actions to increase the valuation
• Forecasts based on relevant information about future earning potential and how to demonstrate this potential to the buyer
• Data-based verification of the company’s financial situation and forecasts, and arguing the valuation based on a clear report
• A clear summary report including action recommendations