The ability to execute due diligence efficiently is a crucial aspect of the M&A process. Knowing the most frequently asked due diligence questions and answers will help you assess possible risks and make a sound decision.
What strategy do you have for resolving any issues that arise in the course of due diligence?
The interviewer is looking for how you would handle the situation in which there is an inconsistency between public records and internal documents. They are looking for your ability to identify the issue, conduct the necessary research, and then take the necessary steps to resolve it. This test also examines your attention to detail and your ability to work under pressure deadlines.
How can you judge the quality of financial information for a business?
The goal of the buy side is to determine if the company has enough revenue to pay its debts and other obligations. This is done by analyzing the cash flow of the business and comparing it to competitors. It is important to know the company’s assets as well as liabilities.
What are the steps you take to safeguard confidential information when conducting due diligence?
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