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Financial due diligence - Studio Corno

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Financial and accounting due diligence

Financial and accounting due diligence is an activity involving the verification, analysis and control of three fundamental aspects of a target company: operating results, financial position and cash flows, in view of a global extraordinary transaction (M&A) or a single check-up.

Extraordinary transactions are a delicate and complex time in the life of a company. Financial due diligence services maximise the effects of the deal for all parties involved, as well as first of all establishing beforehand the feasibility of the entire transaction, its execution methods and impacts on taxation.

We provide support in analysing historic and current trends and outlooks, in order to assist companies in acquisitions, divestment and strategic alliances.

By conducting these investigations, we evaluate the advantages and risks of a business deal for our clients, to establish elements of feasibility or critical aspects in relation to extraordinary transactions. Analysis of financial position is accompanied by tax due diligence, which is the key to identifying any elements of risk or critical issues not revealed by the seller.

Meeting these objectives involves conducting investigations, including of an accounting nature, which can affect the income statement and balance sheet data used as a basis for calculating the company’s value.

Our services

Accounting and tax due diligence

Analyses the accounting and tax situation of the company, by analysing the financial statements and income statement, making sure that these comply with the statutory and tax regulations and that they have been prepared in accordance with correct accounting standards, checking that the books and VAT books have been kept in the proper manner and verifying tax returns and any audits performed by the tax authorities.

Financial due diligence

Allows a more detailed financial analysis of the company, with the aim of identifying and evaluating the strengths and critical issues of the financial aspects of the target company (profitability, cash flows and debt) at the actual time of the investigation, but with a view to reflecting how any emerging considerations may affect future performance.

The analysis of all assets and liabilities, focusing on revenues and profit margins, provides a more long-term vision, which is useful in determining the value of the company examined.

WHAT WE CAN DO FOR YOU

Financial due diligence activities

Our team of expert consultants in financial due diligence activities can assist you with the structuring of transactions and in the drafting and negotiation of purchase and sale contracts, at various stages of the negotiations, before, during or on completion of M&A transactions.

We aim to help you maximise the value of the transaction and comprehend the tax implications of the ownership transfer of the target companies.

  • Buy-side and sell-side financial due diligence

  • This activity is completed before entering into the contract and focuses on the salient aspects of the negotiation. The outcomes influence the decision to conclude the deal and enable informed drawing up of the purchase contract and its terms and conditions.

  • Post-signing and pre-closing financial due diligence

  • Verification activities carried out when a contract already exists between the parties but is not final. In this case, the investigation activity involves verifying the data acquired and steers subsequent negotiations, such as the transparent definition of the relevant accounting standards.

  • Post-closing checklist

  • Lastly, we support clients in the “post-closing” phase, with regard to planning the most suitable strategies to manage, minimise and eliminate the areas of risk highlighted during the due diligence process. We offer a detailed analysis following the conclusion of the contract, enabling the buyer to gain in-depth knowledge of the asset they have purchased.

This activity is completed before entering into the contract and focuses on the salient aspects of the negotiation. The outcomes influence the decision to conclude the deal and enable informed drawing up of the purchase contract and its terms and conditions.

Verification activities carried out when a contract already exists between the parties but is not final. In this case, the investigation activity involves verifying the data acquired and steers subsequent negotiations, such as the transparent definition of the relevant accounting standards.

Lastly, we support clients in the “post-closing” phase, with regard to planning the most suitable strategies to manage, minimise and eliminate the areas of risk highlighted during the due diligence process. We offer a detailed analysis following the conclusion of the contract, enabling the buyer to gain in-depth knowledge of the asset they have purchased.

TAILOR - MADE SOLUTIONS

Contact our experts

Due diligence is an important tool aimed at minimising current and potential risks in relation to extraordinary operations.

Copyright 2022 Corno – Centro Terziario Avanzato s.r.l.
VAT 00947490967 | Share capital: 100.000€ | Tax code 09206750151 | REA 1285358

Copyright 2021 Corno – Centro Terziario Avanzato s.r.l.
P.IVA 00947490967 | Capitale sociale: 100.000€ | C.F. 09206750151 | REA 1285358

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