Due Diligence in Business An introspection

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Due Diligence in BusinessAn introspection

• Vijay Thacker
• Director, Horwath Consultants India
• 23 November 2008

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Financial Due Diligence - SCORER

• Stability business, financials, funding
• Competitiveness product, pricing, reach, brand
  etc
• Oversight quality, clarity, compliance,
  attitude
• Reliability financials, estimates, assumptions
• Efficiency operative, cost, flexibility
• Risk identification, mitigation, balance
• Affirm / Adjust Value affirm value or adjust to
  be meaningful

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Financial Due Diligence -SCARE

• Systems and controls weak, inoperative or
  strong?
• Concentration is there a core or it there a
  scatter?
• Approach of care or profligacy?
• Relatives business diversions and dilutions?
• Employees morale, balance, vision, outlook?
• Due Diligence must sound alarms!!

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Recent Business - Due Diligent?SCARCE

• Super Profits sought
• Competitive Pulls not resisted
• Accountants Ignored
• Resources not balanced
• Costs allowed to expand
• Experience replaced with youthful exuberance
• Risks allowed to silently pile-up

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Questions to ponder

• Did Windfalls become the business plan?
• Were Valuations reasonable? Did Value for one
  become the benchmark for all
• Was funding stable and balanced?
• Was the business model strong and stable?
• Were planning / expansion assumptions reliable?
• Were cost efficiencies watched?
• Did Greed / Competition overcome Good Sense?
• Did Oversight fail?

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Finally

• Did we lose our respect for Money?
• Did we truly value Money?