Financial Due Diligence Techniques Training Course

This course equips participants with practical techniques to plan and perform financial due diligence for acquisitions, investments, and partnerships. It focuses on quality of earnings, net debt and working capital analysis, risk identification, and reporting findings that inform deal decisions.

Target Groups

• Corporate finance and M&A professionals
• Investment analysts and managers
• Financial controllers and accountants
• Auditors and transaction advisors
• Private equity and venture capital staff
• Legal and commercial advisors
• Managers and supervisors seeking to strengthen organizational practice in this field
• Consultants and professionals supporting related organizations

Course Objectives

By the end of this course, participants will be able to:

• Explain the purpose and scope of financial due diligence
• Plan and manage a due diligence engagement
• Assess quality of earnings
• Analyze net debt and debt-like items
• Evaluate working capital and cash flow
• Review forecasts and business plans
• Identify financial, tax, and operational risks
• Detect red flags and unusual transactions
• Prepare due diligence reports
• Support valuation and negotiation with findings

Course Modules

Module 1: Introduction to Financial Due Diligence

• Types and purposes of due diligence
• Deal lifecycle
• Roles of buyers, sellers, and advisors
• Scope and engagement planning
• Ethics and confidentiality

Module 2: Planning and Information Requests

• Risk-based planning
• Due diligence request lists
• Data room management
• Management interviews
• Timelines and workstreams

Module 3: Quality of Earnings Analysis

• Normalizing earnings
• Non-recurring items
• Revenue recognition review
• Margin and cost analysis
• Sustainable EBITDA

Module 4: Net Debt and Debt-Like Items

• Defining net debt
• Off-balance sheet obligations
• Contingent liabilities
• Leases and pensions
• Purchase price adjustments

Module 5: Working Capital and Cash Flow Analysis

• Normalized working capital
• Seasonality
• Cash conversion
• Capital expenditure needs
• Free cash flow assessment

Module 6: Assets, Liabilities, and Balance Sheet Review

• Asset valuation issues
• Inventory and receivables review
• Provisions and accruals
• Related party balances
• Accounting policy consistency

Module 7: Forecast and Business Plan Review

• Assessing assumptions
• Historical accuracy
• Sensitivity analysis
• Synergy assessment
• Funding requirements

Module 8: Tax, Legal, and Operational Considerations

• Tax exposures
• Contract and legal risks
• Operational dependencies
• Regulatory compliance
• Integration matters

Module 9: Fraud Risks and Red Flags

• Earnings manipulation indicators
• Related-party transactions
• Unusual journal entries
• Management integrity checks
• Escalation procedures

Module 10: Practical Exercises and Capstone Project

• Performing a mock due diligence on a case company
• Normalizing earnings
• Analyzing net debt and working capital
• Drafting key findings and red flag report
• Presenting findings and price implications