Financial Due Diligence in M&A is the detailed review of a target company’s financial health before a merger or acquisition. It focuses on analyzing financial statements, revenue streams, cash flow, profitability, debt levels, and working capital. This process helps identify financial risks, inconsistencies, and hidden liabilities that may affect the deal value. Analysts also evaluate historical performance, forecasts, and financial controls to assess sustainability. Financial due diligence supports accurate valuation and informed negotiation during M&A transactions. It is essential for ensuring transparency, reducing risk, and making sound investment decisions.
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