Ten core elements of corporate due diligence
Before making an investment decision, project investment, equity investment and enterprise merger and acquisition need to carry out detailed due diligence on the object of investment, and investigate, pay attention to, analyze and judge 10 aspects and 55 key points of the target enterprise, so as to make objective and scientific investment conclusions for the investors to make decisions.The ten aspects, 55 points, covered from macro to micro, from big to small, every aspect of the first four aspects is particularly important, and we will be in accordance with the order, you must first understand, find out in the first four aspects to consider the following six aspects, otherwise the inspection work can be put on hold or give up, because we want to consider a time cost and the economic cost.
1. Due diligence should focus on the team of the enterprise to be invested in: a team
Ii. The due diligence report should explore two advantages: advantageous industries and advantageous enterprises
Iii. The due diligence report of an enterprise shall clarify three modes: business mode, profit mode and marketing mode
Iv. The due diligence report of the enterprise shall be based on four indicators: operating income, operating profit, gross profit rate and growth rate
Five structures (equity structure, executive structure, business structure, customer structure and supplier structure) should be clarified in due diligence
Six aspects should be examined in the enterprise due diligence: historical compliance, financial norms, clean tax payment, clear property rights, labor compliance, safety and environmental protection
7. The due diligence report should focus on seven key points: standard compilation, regular meeting system, corporate culture, strategic planning, human resources, public relations and incentive mechanism
Eight, the enterprise due diligence report to in-depth analysis of eight data: total asset turnover rate, asset-liability ratio, current ratio, accounts receivable turnover days (accounts receivable turnover rate), gross profit margin of sales, return on net value, net cash flow of business activities, market share
Nine procedures should be well executed: data collection, interviews with senior executives, enterprise investigation, competition investigation, visits to suppliers, customers, associations, governments and securities firms
X. corporate due diligence report shall include ten aspects: enterprise history, enterprise products and technologies, industry analysis (opportunities and threats), enterprise advantages and disadvantages, development planning, equity structure, executive structure, financial analysis, financing plan and investment advice.