Are you acting from the or the sell-side (vendor due diligence) ? What specific industry is the target company operating in?
While each KPMG FDD report is tailored to the specific transaction and client needs, certain components consistently form the backbone of the analysis.
: Breakdown of reported vs. adjusted earnings, stripping out one-off integration costs or non-recurring items. Revenue Sustainability financial due diligence report kpmg pdf
Commercial banks and institutional lenders frequently require a report from a top-tier firm like KPMG before approving acquisition financing.
Monthly NWC trends, inventory turnover rates, and collection cycles (DSO/DPO). Asset Reinvestment Are you acting from the or the sell-side
| Risk Area | Description | Financial Impact | |---|---|---| | Customer concentration | Single customer >25% revenue | EBITDA at risk: $Xm | | Supplier dependency | Sole source for raw material | Margin risk: X% | | Tax | Uncertain VAT treatment on exports | Potential liability: $Xm | | Litigation | Pending IP claim | Legal provision: $Xm |
As a buyer, you receive a comprehensive analysis of the financial situation of the target company. This analysis uncovers potential financial risks and identifies key information to use in negotiations with the seller. Typical procedures include: : Breakdown of reported vs
Evaluate the management information systems, controls environment, and potential IT vulnerabilities.
: It uncovers hidden financial risks, such as undisclosed liabilities or commitments that could endanger future performance.
Unfunded pension liabilities, deferred tax liabilities, underfunded Capex commitments, and unusual customer deposits. Typical Structure of a KPMG FDD PDF