From a seller's perspective: Sellers do due diligence to build trust with the buyer.

From a seller's perspective: Sellers do due diligence to build trust with the buyer. Depending on the situation, sometimes it even helps the seller improve their position as a result of this process. So, it's not uncommon for sellers to perform their due diligence before getting into potential deals. Types of due diligence: Legal Due Diligence: This looks at different legal aspects important for the target company, like contracts, intellectual property, history of litigation, compliance with laws, and employee agreements. The goal is to find any legal issues, risks, or obstacles that could affect the acquisition. Financial Due Diligence: Here, the focus is on a deep dive into a company's financial stability, risks, and opportunities. It reveals the true financial health of a company, starting with a review of financial statements—the income statement, balance sheet, and cash flow—to check the accuracy and sustainability of earnings. Operational Due Diligence: This evaluates how well the target company operates. It includes looking into supply chains, production capabilities, and IT and operational processes. It highlights areas where the company might be underperforming operationally or potential places where two companies can find synergies and how smoothly they could come together, plus opportunities for better efficiency or teamwork after integrating. Market and Commercial Due Diligence: This involves figuring out the target's strategic position, and analyzing competitors, customer interests, and growth potential in its sector. It includes looking at industry trends, market demand, and how a company can find its spot in the marketplace. From this, it gives insights into how much the company can grow long-term and stay afloat, providing a look at whether or not it’s a smart investment considering growth potential.

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