Nevena Miskovic

The Financial Due Diligence Checklist!!

All important FDD checks and insights are in one place.

Hope this can help you improve your knowledge of FDD.


🚀 𝗛𝗲𝗹𝗽 𝗺𝗲 𝘀𝗵𝗮𝗿𝗲 𝘁𝗵𝗲𝘀𝗲 𝗲𝘀𝘀𝗲𝗻𝘁𝗶𝗮𝗹 𝗰𝗵𝗲𝗰𝗸𝘀 𝘄𝗶𝘁𝗵 𝘁𝗵𝗶𝘀 𝗙𝗥𝗘𝗘 𝗖𝗵𝗲𝗰𝗸𝗹𝗶𝘀𝘁.

𝗗𝗼 𝘆𝗼𝘂 𝗹𝗶𝗸𝗲 𝘁𝗵𝗲 𝗱𝗼𝘄𝗻𝗹𝗼𝗮𝗱𝗮𝗯𝗹𝗲 𝗣𝗗𝗙 𝘃𝗲𝗿𝘀𝗶𝗼𝗻? 𝗗𝗠 𝗺𝗲 𝗼𝗿 𝗰𝗼𝗺𝗺𝗲𝗻𝘁.

𝗛𝗲𝗿𝗲 𝗶𝘀 𝘄𝗵𝗮𝘁 𝘁𝗵𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗗𝘂𝗲 𝗗𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗖𝗵𝗲𝗰𝗸𝗹𝗶𝘀𝘁 𝗜𝗻𝗰𝗹𝘂𝗱𝗲𝘀:

▶️ General checks

▶️ Analytical procedures

▶️ Internal controls check

▶️ Property, plant, equipment, and intellectual property checks

▶️ Inventories check

▶️ Account receivables check

▶️ Revenues check

▶️ Loans and interest expenses check

▶️ Account payables check

▶️ Commitments and contingencies check

▶️ Salaries, employee costs check

▶️ OPEX check

▶️ Equity check

▶️ Loans and financial liabilities check

▶️ Intercompany transactions check



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#duediligence #tax #finance #accounting

Financial Modeling vs. Forecasting: What's the Difference?

#Financial_Modeling
1. Purpose:
- Develop a detailed simulation of a company's financial standing..
- Used for decision-making, valuation, budgeting, and strategic planning.

2. Components:
- Includes income statements, balance sheets, and cash flow statements.
- Often involves scenario analysis and sensitivity analysis.

3. Process:
- Built on historical data and future projections..
- Financial models are flexible, allowing for easy adjustments and exploring different scenarios.

4. Usage:
- Business valuation, investment analysis, project financing, and risk management.
- Supports long-term strategic planning and detailed financial analysis.

5. Complexity:
- Typically more complex, involving detailed and comprehensive financial data.
- Requires advanced skills in financial analysis and modeling software.

#Financial_Forecasting
1. Purpose:
- Predict future financial outcomes based on historical data and trends.
- Used for budgeting, planning, and short-term decision-making.

2. Components:
- Focuses on projecting future revenues, expenses, and cash flows.
- Utilizes statistical methods and trend analysis.

3. Process:
- Leveraging historical data and market trends to forecast future outcomes.
- Forecasts can be short-term (monthly, quarterly) or long-term (annual).

4. Usage:
- Budgeting, financial planning, and setting performance targets.
- Helps manage cash flow, anticipate financial needs, and make operational decisions.

5. Complexity:
- Generally less complex than financial modeling, focusing more on projection accuracy.
- Requires understanding of historical data, market trends, and forecasting techniques.

Summary:

➡️Financial Modeling:

Comprehensive financial models incorporate detailed statements, explore various future scenarios through strategic planning, and necessitate a more intricate approach compared to forecasting.

➡️Financial Forecasting

Forward-looking forecasts, focusing on short-term revenue and expense projections to inform budgeting and planning.
Source: Beta insight
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