The ability to effectively conduct due diligence is an essential aspect of the M&A Process. Knowing the most frequently asked due diligence questions and answers will help you determine the potential risks, and make an informed decision.
What are your methods for solving any discrepancies that arise in the due diligence process?
The interviewer is interested in your approach to respond to a situation where there is a contradiction in public documents and internal records. You will be tested in your ability to spot an issue, conduct the necessary research and then take steps to address it. This question tests your attention to detail as well as www.bydataroom.com/what-are-the-pros-and-cons-of-an-ma-deal/ your ability under pressure.
How can you assess the quality of the financial data for a company?
The objective of the buy-side is to determine if the target company is able to generate enough revenue to pay off its debts and other obligations. This is done by analysing the cash flows of a business and comparing them with the ones of its rivals. It is crucial to know the company’s current assets (accounts receivable and inventory) and liabilities (accrued payroll as well as accounts payable and accrued interest).
What are the best ways to protect confidential information while conducting due diligence?