Determining the "normal" level of capital required to run the business day-to-day to avoid post-close cash surprises.
Analyzing customer concentration (e.g., top 10 customers), churn rates, and whether revenue is recurring or one-time. Private Equity Company Due Diligence
The Private Equity Playbook: Mastering Company Due Diligence Determining the "normal" level of capital required to
Identifying one-time expenses, owner-related costs, or non-recurring income to find the true underlying profitability. This is the cornerstone of any PE deal
This is the cornerstone of any PE deal. Unlike standard audits, PE financial diligence focuses on the "run-rate" of the business to ensure the price paid is fair.
In the world of Private Equity (PE), due diligence is the high-stakes period where a potential deal is either validated or dismantled. It is a rigorous, multi-disciplinary investigation that typically occurs after a Letter of Intent (LOI) is signed, lasting anywhere from . For PE firms, this isn’t just a "checkbox" exercise—it's the foundation for your entire post-close value creation plan. 1. Financial Due Diligence: The Quality of Earnings (QoE)