financial due diligence

Financial due diligence is the careful investigation and analysis of a company's financial records before a major transaction, like a purchase or investment. It involves reviewing financial statements, cash flow, debts, and other key financial data to ensure everything is accurate and to assess the company's true financial health. This process helps buyers or investors identify potential risks, verify the company's valuation, and make informed decisions, reducing the chances of surprises after the deal is completed. Essentially, it’s a thorough check to confirm that the financial information is reliable and to understand the company's financial position.