Due diligence is a process that varies based on the company and industry as well as the nature of the transaction. Its goal is to identify problems that are not apparent before they harm the transaction and the parties' respective interests.

During due diligence, the buyer examines the financial records of go now a company that is a target, and also the accuracy and completeness of the figures in the Confidentiality Info Memorandum (CIM). The buyer also examines the target's fixed assets (opens in a new tab) which include vehicles, machinery, and office furniture, based on appraisals and other documents. Buyers will also conduct an in-depth analysis of the target's deferred expenses (opens in a new tab), expense prepaid (opens in a new tab) and receivables (opens a new tab).

Operational Due Diligence(opens in new tab) involves analyzing the business model and culture, as well as the leadership of a company. This includes assessing whether the business is well placed to thrive in its target market and the credibility of its brand. It also evaluates the company's capacity to meet profits and revenue targets. Operational due-diligence also involves reviewing a target's HR policies and organisational structures in order to evaluate the risk of employees, such as golden parachutes and severance packages(opens in an entirely new tab).

Risk assessment is the foundation of due diligence. It covers financial and legal risk, as well as reputational issues that could arise from the transaction. A thorough due diligence process determines the risks and minimizes them, making sure that a deal is successful.