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Financial Due Diligence That Tests the Sustainability of Earnings and Cash Flow
A headline EBITDA number does not explain how much of the performance is sustainable, cash-generative or exposed to accounting and commercial risk. Contetra helps investors, acquirers, lenders, founders and management teams understand the financial drivers and risks behind a transaction.
Our work is tailored to the transaction and decision. It can range from a focused red-flag review to a detailed quality-of-earnings, working-capital and net-debt assessment, with clear explanations of limitations and information gaps.
Move beyond reported profit to understand sustainable performance, cash conversion and deal adjustments.
Financial Due Diligence and Quality of Earnings Services
Quality of earnings
Reported-to-normalised EBITDA, non-recurring items, cut-off, accounting policies, margin and trend analysis.
Revenue and customer analysis
Growth, concentration, churn, pricing, mix, contracts, seasonality, backlog and revenue quality.
Working capital and net debt
Normal levels, seasonality, ageing, inventory, debt-like items, cash-like items and deal mechanisms.
Cash flow and red flags
Cash conversion, capital expenditure, commitments, related parties, contingent items, data gaps and accounting risks.
Our Financial Due Diligence Process
Step 1Define the transaction questions and scope.
Step 2Build a traceable financial fact base.
Step 3Analyse sustainable earnings, cash and balance-sheet items.
Step 4Report findings, adjustments, risks and decision implications.
Understand what the numbers mean for the transaction
Discuss a buy-side, sell-side, lender or pre-investment due-diligence requirement.