Financial Due Diligence
Know exactly what you're walking into — before you commit.
FDD is an independent, deep-dive examination of an entity's financial health that goes beyond what's on paper — questioning the quality of earnings and uncovering hidden liabilities.
The goal is simple: no surprises after you've signed. FDD challenges the assumptions behind projections and identifies patterns that audited accounts alone won't reveal.
What is FDD?
No surprises after you've signed
FDD goes beyond what's on paper. It questions the quality of earnings, challenges the assumptions behind projections, uncovers hidden liabilities, and identifies patterns that audited accounts alone won't reveal.
Who commissions it
- Banks and lenders before credit approval
- Investors before funding a business
- Acquirers before a merger or acquisition
- Partners before a joint venture
- Institutions before a large contract
What you get out of it
- Verified revenue, margins, and cash flows
- Clarity on debt levels and repayment ability
- Identified risks before they become your problem
- Confidence to negotiate from a position of knowledge
- A documented basis for your decision
Scope of work
Six areas we examine in depth
Every FDD engagement covers these core areas. The depth of each is calibrated to the size and complexity of the entity.
Revenue quality
Is revenue real, recurring, and sustainable? We test for one-off items, related-party income, and recognition inconsistencies.
Profitability analysis
EBITDA, PAT, and margin trends over three years — adjusted for non-recurring items to show true operating performance.
Balance sheet review
Assets, liabilities, net worth, and working capital — verified for completeness, accuracy, and off-balance-sheet exposure.
Cash flow examination
Operating, investing, and financing cash flows — to confirm whether reported profits are actually converting into cash.
Debt & capital structure
Total debt, gearing ratios, interest coverage, and the entity's real capacity to service existing and proposed obligations.
Compliance & disclosures
Tax filings, statutory dues, audit observations, and any contingent liabilities that could materialise post-transaction.
What We Look For
Red flags we commonly uncover
These are the issues that due diligence exists to find — before they become your liability.
Inflated revenue
Related-party transactions or early recognition masking the true top line.
Hidden liabilities
Contingent obligations, pending litigation, or undisclosed borrowings off the balance sheet.
Weak cash conversion
Profits that look strong on paper but aren't backed by actual cash generation.
Deteriorating liquidity
Current ratio trends and stretched working capital cycles signalling near-term stress.
Compliance gaps
Overdue tax filings, GST discrepancies, or unresolved audit qualifications.
Unsustainable debt load
Gearing levels or debt service ratios that leave little room for any operational setback.
Our Process
How we conduct an FDD engagement
A consistent, four-stage process — thorough at every step, with nothing taken at face value.
Scoping and data request
We define the exact scope upfront and request three years of audited financials, tax filings, GST records, loan statements, and management accounts.
Independent verification
All figures are cross-checked against source documents and government portals — GST, MCA, and statutory records — not just the entity's own submissions.
Analysis and findings
We analyse trends, test assumptions, adjust for non-recurring items, and document every material finding with supporting evidence — positive and negative.
Report and observations
A structured, confidential FDD report is delivered — covering key findings, financial summaries, identified risks, and observations to inform your decision.