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Financial Due Diligence A Crucial Factor in Small Business Acquisition

Business acquisition, whether big or small, requires a thorough financial analysis. Financial due diligence is an exhaustive process that determines the decision to buy. It is crucial to the success of especially small and midsize businesses. The objective of the process, the timing, and the entity responsible for it are the critical factors that must be considered before initiating the process of Financial Due Diligence. Financial due diligence ensures a thorough analysis of working capital, cash flow, profit and loss, and balance sheet items. The findings of the process impact the negotiation strategy, revenue assurance, cash pilferage, and internal controls in place, among other things. It is an inevitable process, and an SMB must include it in the acquisition process.