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Due Diligence

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Description of Due Diligence. Explanation.



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Definition Due Diligence. Description.

 

Due Diligence is the process whereby an investing party investigates, analyses, and evaluates an intended major investment, transaction, takeover, or business partnership prior to committing capital to it. The purpose of a due diligence investigation is to determine whether the investment makes financial and/or strategic sense and to check if the information about the investment that is available is correct and complete. Also, it is a way of preventing unnecessary harm to either party involved in a transaction.

 

Some typical areas for due diligence include the key risks associated with the opportunity, quality of the management team, assets, liabilities and solvency, a determination of the  purchase price, press and SEC filings, regulatory and licensing problems, liens and judgments, conflicts of interest, civil and criminal litigation matters, etc.
 


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Compare with: Strategic Fit  |  Strategic Risk Management  |  Scenario Planning

 

Return to Management Hub: Decision-making & Valuation  |  Finance & Investing  |  Strategy

 

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End of description Due Diligence. An explanation.

 

 

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