Quality of earnings
Reported profit adjusted for one-off items, owner expenses and accounting choices, to show the earnings you are actually paying for.
04 · Grow and transact
Financial Due Diligence and Deal Structuring
Our financial due diligence services in Bangalore give buyers, investors and sellers an independent read of the numbers before money changes hands. We look past headline revenue to what the earnings, cash and liabilities really are, and tell you plainly what that means for the price and the terms.
Many deals between small and mid-sized businesses in Bengaluru close on trust and a few spreadsheets. That works until an unpaid tax demand, a related-party arrangement or a major customer on the way out surfaces after the money has moved. Diligence sized to the deal finds these early, while they can still be priced in or written into the agreement.
Who it's for
Built for owners at this stage
- Owners acquiring a competitor, a supplier or another business
- Investors taking a significant stake in a private company
- Sellers who want their numbers tested before a buyer tests them
- Partners bringing an existing business into a new venture
What we hear
Problems we solve
- Reported profit includes one-off income or costs that will not repeat
- Working capital looks healthy at signing and drains in the months after
- GST, TDS or income-tax filings have gaps that become the new owner's problem
- The deal is a share purchase when an asset purchase would carry less risk, or the reverse
- The full price is paid upfront, with no protection if the numbers turn out wrong
The work
What's included
Working capital and liabilities
Receivables, payables, inventory, borrowings and contingent liabilities reviewed, with a view on the working capital the price should assume.
Tax and compliance review
GST, TDS, income tax, payroll and ROC filings checked for gaps and open exposures, with our partner Chartered Accountants where needed.
Findings report
A short report that ranks each issue by its effect on price, on terms, or on whether to proceed at all.
Deal structuring
Share or asset purchase, staged payments, earn-outs, holdbacks, and the warranties and indemnities that should follow from what diligence found.
Our approach
How we deliver it
We agree the scope first, based on the size of the deal and where the risk is likely to sit; a restaurant group and a software company need different questions. We then work from the target business's books, bank statements and filings, cross-check them against each other, and raise queries with the other side as we go rather than in one long list at the end.
Findings feed straight into the structure. Where diligence shows risk, we suggest how to price it, defer it or protect against it, and work with the advocates drafting the agreement, ours or yours. If the transaction also involves a restructuring, a joint venture or a new entity, that part sits with our business structuring work so the two fit together.
How we work
Understand first, then solve
- UnderstandHow your business actually runs
- DesignA solution that fits you
- ImplementProcesses, systems and tools, put in place
- Stay with youAs your business grows
Working together
How engagements usually run
Due diligence and deal structuring run as a project tied to the transaction timeline. Sellers who want to find and fix issues before going to market often start with a one-time diagnostic.
- One-time diagnosticA clear look at where the business stands and what to fix first.
- ProjectA defined piece of work, from setup to a restructuring or fundraise.
- Monthly retainerOngoing accounting, compliance and Virtual CFO support.
FAQ
Questions owners ask
What does financial due diligence cover?
It usually covers the quality and sustainability of earnings, working capital, debt and other liabilities, cash flow, tax and statutory compliance, and the main contracts behind revenue. The depth depends on the deal and on the risks the buyer or investor is most concerned about.
How is due diligence different from an audit?
An audit gives an opinion on whether past financial statements are fairly presented. Due diligence is done for a specific deal and looks forward: it asks whether the earnings will continue, what risks come with the business, and how those should affect the price and terms.
Should I buy the shares or the assets of a business?
Buying shares means taking over the company with its full history, including liabilities you may not know about. Buying assets lets you choose what you take on, but can be slower and carry different tax and transfer costs. The right choice depends on what diligence finds and on tax advice for that specific deal.
Do sellers need due diligence too?
It often helps. Testing your own numbers before a buyer does gives you time to fix issues, prepare explanations and avoid a price cut late in the deal.
Keep exploring
Related services
Let's start with a conversation.
Tell us where your business is today and where you want it to be. We'll listen first, then show you how we can help.
Statutory filings, legal documents and valuation reports are prepared and signed by appropriately qualified professionals (Chartered Accountants, Company Secretaries, advocates and IBBI-registered valuers) from our team and partner network. This page is general information, not legal, tax or financial advice.