Due Diligence Service Due Diligence Service | Page 5

Financial Due Diligence
The financial Due diligence process primarily focuses on identifying the actual financial picture of the
company. In this process, the financial data is scrutinized, and the areas where potential risks lie are
identified.
It involves a thorough check on fixed costs, variable costs, profit margins, internal control framework,
and major customer accounts.
Based on the financial diligence report, the buyer gets the knowledge about the company’s financial
history and current performance. It even helps him to forecast future growth and investment.
Commercial Due Diligence
The commercial Due Diligence deals with the broader aspect in comparison to the financial one..
Through this process, a private equity firm estimates the commercial attractiveness of a company.
In addition to the financial health of the company, it also focuses on the internal as well as external
environment of the targeted company.
Through the Commercial Diligence report, one can gauge the company’s performance and its chances to
meet the target. It also presents the potential problems which the buyer may face as a result of the
acquisition.
Legal Due Diligence
Legal Due Diligence is nothing but an investigation of the legal aspects of a transaction. Accordingly, the
legal structure of the entity, contracts, and agreements, assets and liabilities, contingent liabilities, and
pending legal proceedings are explored.
It ensures that all the legal risks associated with the transaction are identified and suitably classified.
Operational Due Diligence