Due Diligence Consulting

Whether you are launching your journey into business ownership, expanding your current footprint, or acquiring a specific product line, the transition requires more than just a surface-level review. Due diligence is the bridge between a seller’s initial presentation and a truly sound investment.

At PSA CPA, we provide a rigorous financial appraisal of potential transactions. Our objective is to verify reported data, uncover latent tax or financial risks, and assess the true economic viability of the acquisition. We ensure your investment is built on a verified foundation, protecting your capital from unforeseen liabilities.

What is Due Diligence?

Due diligence is the essential period of research and analysis that occurs before you finalize a business transaction. Whether you are purchasing an existing company, acquiring a specific product line, or investing in a new venture, this is the process of verifying that the opportunity is exactly what the seller claims it to be.

It serves as your primary defense against “buyer’s remorse” by uncovering the financial, legal, and operational realities of a business. We move you from a state of interest to a state of informed confidence by focusing on three key areas:

• Verification: We confirm that the revenue, assets, and customer base reported by the seller are accurate and documented.
• Risk Identification: We look for “skeletons in the closet,” such as pending litigation, tax liabilities, or declining market trends that could impact your future profits.

How We Protect Your Investment

Conducting due diligence on a small business is a complex, time-consuming process that requires a surgical look at records. We look past the surface to identify potential deal breakers and financial red flags that are easily overlooked during the excitement of a deal.

• Strategic Support: You should not navigate a purchase alone. We work alongside your legal counsel to provide the specialized financial expertise needed to spot discrepancies.
• Structured Methodology: We use a rigorous, customized checklist for every acquisition. This ensures that every stone is turned, from historical performance to future sustainability.

Financial Due Diligence Focus

Our primary goal is to validate the financial integrity of the business. We deep-dive into the following areas to ensure the numbers tell a consistent story:

Financial Performance & Health

• Review of annual and quarterly income statements, balance sheets, and cash flow records.
• Analysis of revenue and gross profit by product or service line.
• Assessment of accounts receivable aging and collection history.

Operational Assets

• Inventory valuation and turnover rate analysis to identify “dead” stock.
• Itemized review of equipment, real estate, and furniture, including market value appraisals.

Future Viability & Risk

• Stress-testing owner-prepared projections and the assumptions behind them.
• Review of historical pricing strategies and recent increases.
• Review of business tax filings, outstanding liabilities, debt terms, and shareholder equity.

Move Forward with Confidence

A structured approach to due diligence identifies risks before they become your problems. We provide the clarity you need to negotiate from a position of strength, adjust your offer based on verified data, or walk away when the numbers do not add up.