Financial due diligence isn’t just for M&A deals—it’s the foundation of trust in any business transaction. Yet, I’ve seen many businesses overlook key financial details, leading to lost funding, valuation cuts, or unexpected liabilities.
🔎 Red flag I’ve seen firsthand:
A company seeking investors claimed a 30% EBITDA margin, but a closer look revealed aggressive revenue recognition and unaccounted expenses. After adjustments, the actual margin was closer to 12%—a deal-breaker for investors.
💡 How to avoid surprises?
Whether you’re preparing for a funding round, acquisition, or just strengthening financial controls, a structured financial due diligence checklist is essential. Here’s what I always check:
✅ Quality of earnings – Are revenues sustainable, or are there one-time boosts?
✅ Cash flow accuracy – Is there a gap between reported profits and actual cash movements?
✅ Working capital trends – Are AR & AP cycles aligned, or is the business masking liquidity issues?
✅ Debt & liabilities – Are there hidden obligations impacting future cash flow?
✅ Internal controls – Are financial processes reliable, or prone to errors & fraud?
These are just a few key areas—I follow a 50+ point due diligence framework to ensure businesses present a clear, investor-ready financial picture.
If you’re scaling, fundraising, or selling your business, when was the last time you stress-tested your financials?
Let’s connect. A quick financial check-up today can prevent costly surprises tomorrow.
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