DD
Due Diligence
Short definition
Due diligence is the testing of financial, legal, tax, operational and commercial assumptions before a deal. It is a stress test of the price deck.
Detailed explanation
Scope, materiality and data-room quality bound the findings. There is no “clean DD”; there is how risk goes into price, indemnity or a walk-away.
Time pressure skips red flags. Vendor DD does not bind the buyer; independent confirmation is required.
Why it matters for the CFO
Closing without DD parks covenant and cash surprises after close. A finding is a price chip or a walk-away.
How to read it
The findings list updates the EV model. An unupdated model turns DD into theatre.
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What to learn next
Definitions are educational. They are not investment, credit or tax advice.