For a buyer, one of the most critical parts of the process is “due diligence.” During this process, the buyer verifies the financial and non-financial information provided by the seller that was used as the basis for making the offer. It is critical to bring adequate expertise in to assist in this evaluation. MAB can assist in the following ways:
- Review of financial information/perform trend analysis
- Verify that financial information is supported by underlying accounting records
- Review support for “EBITDA/Discretionary Earnings” adjustments
- Review how revenue is recognized
- Review how expenses are reported and recorded
- Complete a financial analysis of key assets such as accounts receivable, inventory, fixed assets and intangible assets
- Reconcile financial records to tax returns
- Perform other financial analysis as deemed necessary for the transaction
It is important to note that there will also be substantial non-financial due diligence required such as marketing, operational, legal, IT, etc. While MAB does not perform these services, we are happy to provide referrals to qualified resources that can handle this part of the process.
My Asset Broker is paid for this type of work on the basis of “fee for services.” This would be a non-contingent fee that is due upon completion of the services, regardless of the outcome of the transaction.