Due Diligence

Represents the process of analysis, review, research and validation of qualitative and quantitative information during the purchase-sale process. There are different types of due diligence but the most common are financial, legal and operational. Sullivan Consulting specializes in financial due diligence. Without a doubt, it represents one of the most critical and relevant when making the final purchase decision. We make sure to develop the process in a confidential and detailed manner, ensuring that we obtain all the necessary information to determine if the purchase is advisable or not.

The financial due diligence includes a detailed analysis of the historical financial statements as well as future projections to determine the viability of the transaction. The main issues that must be addressed in the financial due diligence are:

  • Revenue model: recurrent vs. non-recurring
  • Revenue growth
  • EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) vs Adjusted EBITDA
  • Valuation of the company or assets
  • Operating margins
  • Accounts receivable¬†
  • Accounts payable
  • Current and fixed assets
  • Operating, financing and investing cash flow
  • Working capital¬†
  • Liquidity, solvency, capital, earnings and cash flow ratios
  • Return on investment
  • Historical budgets and variances
  • 5 year projections
  • Short and long-term debt
  • Capital leases (equipment and machinery)
  • Capital expenditures (CapEx)
  • Taxes

Contact us to guide you about the due diligence process.