Financial Due Diligence Report Kpmg Pdf |best|
A financial due diligence (FDD) report from a "Big Four" firm like KPMG is the gold standard for assessing the financial health of a target company during a merger or acquisition. These reports go far beyond standard audits, focusing on the "quality of earnings" and future scalability rather than just historical compliance.
Unlike a statutory audit, which verifies if financial statements are "fairly stated," financial due diligence is a forensic-style analysis designed for a buyer or lender. It identifies the underlying drivers of a business and uncovers potential "deal-breakers" or valuation adjustments. financial due diligence report kpmg pdf
A standard high-level report, such as those found in KPMG's project archives , generally follows a structured format: A financial due diligence (FDD) report from a
financial due diligence (FDD)
KPMG defines as an investigative analysis of a business to identify key financial risks, potential "deal breakers," and drivers behind maintainable profits and cash flows. Key Insights on the Future of FDD The typical content of a KPMG FDD report
2. Quality of Earnings (QoE)
- Investment Thesis Validation: Does the financial data support the strategic reason for buying the company?
- Key Findings Summary: A bulleted list of the "deal breakers" or "value drivers" discovered.
- The "One-Pager": A single financial summary table showing the Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) bridge. This is the hallmark of any KPMG FDD report.
- Risk Mitigation: High-level recommendations on how to structure the deal (e.g., specific Representations & Warranties needed in the SPA).
The typical content of a KPMG FDD report includes the following sections: 1. Executive Summary
Profitability Trends
: Scrutiny of reported profits to ensure they are sustainable and not inflated by aggressive accounting. 3. Net Working Capital (NWC)