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Due Diligence

What does It Mean?

During a typical investment negotiation process, the investor will conduct due diligence which will include reviewing the business plan, intellectual property strategy, market research document, debtors, inventory levels, management team, employees, etc.

The potential investor will normally conduct his/her due diligence investigation on the business model and assumptions (financial and otherwise) presented in the plans.  If the investor is still interested in a possible acquisition or investment, the investor will then proceed with a review of the pricing proposal for the business.

Current Assets: those items owned by the business which could be turned into cash within the normal operating cycle of the business, usually 12 months.

Examples of current assets are:

* Cash on Hand          * Deposits                                                                                            Property investor

* Sundry Debtors     * Cash Floats

* Inventory                * Stock

Business Forward #53