Quality of earnings
One-offs and adjustments.
All advisory & special projects services
Advisory & Special Projects
Financial Due Diligence
Before you buy, invest in or lend to a business, FinAura examines its finances: whether earnings are real and recurring, normal working capital, debt and debt-like items, tax and compliance exposures, related-party dealings and contingent liabilities. The report sets out findings by their effect on price and terms, in plain language for decision-makers.
- Chartered Accountant-led
- Certification through associate practising CAs
- Fixed scope, fixed fee
What is covered
What Financial Due Diligence Covers
What the numbers really say, before you commit.
Working capital
Normal levels and trends.
Net debt
Debt and debt-like items.
Tax exposures
GST, income tax, TDS.
Compliance
ROC, labour, FEMA.
Findings by impact
On price and terms.
How the month runs
How It Works
Request, analyse, discuss, report.
Step 1
Request
- Information list
- Data room
- Management call
Step 2
Analyse
- Earnings
- Balance sheet
- Tax and compliance
Step 3
Discuss
- Questions
- Management answers
- Adjustments
Step 4
Report
- Findings
- Impact on price
- Deal terms
Your part
What We Need From You
- 01The transaction and its timing
- 02Access to the target's data room
- 03Areas of concern
- 04Your advisers' contacts
Our part
What You Get
- A clear view of earnings quality
- Exposures quantified
- Points for price and terms
- A report decision-makers can read
A common question
What does financial due diligence look for?
Whether reported profit reflects ongoing business, what working capital the business needs, what debts and liabilities come with it, and whether tax and compliance positions hold up.
Each finding is linked to what it means for the deal: a price adjustment, an indemnity, a condition or a reason to walk away.
See M&A and business transfer supportDealPrice and terms
AnalysisEarnings, debt, exposures
DataTarget's records
Who it is for
Who It Is For
Acquirers
Buying a business or stake.
Investors
Before investing.
Lenders
Before large loans.
Joint venture partners
Before combining.
The rules, in plain English
What the Law Says
Companies Act, 2013
Section 247
Where the Act requires a valuation of shares, assets or a business, it is done by a registered valuer under the Companies (Registered Valuers and Valuation) Rules, 2017.
Official source: mca.gov.inFEMA (Non-debt Instruments) Rules, 2019
Pricing
Share issues and transfers involving foreign investors are priced at or above, or for some transfers at or below, fair value under an internationally accepted method, certified as the rules require.
Official source: rbi.org.inCompanies Act, 2013
Sections 230 to 232 and 233
Mergers and demergers go through a scheme approved by the tribunal, with a fast-track route for small companies, startups and holding-subsidiary mergers.
Official source: mca.gov.inThis is general information, not advice for your situation; we confirm what applies to you before any work starts.
Questions we get asked
Financial Due Diligence: Questions, Answered
What is quality of earnings?
An analysis of reported profit to separate recurring earnings from one-off, non-operating or unusual items, giving a better basis for price.
How long does due diligence take?
It depends on the size of the target and the state of its records; we agree a scope and timetable at the start.
Do you do legal due diligence?
No. We cover financial, tax and compliance; legal diligence is done by lawyers, and we coordinate with them.
Can you do sell-side diligence?
Yes. Reviewing your own business before a sale is covered by our transaction readiness service.
Often Taken Together
All 12 Advisory & Special Projects services01Advisory & Special ProjectsM&A and Business Transfer SupportFinancial and tax work on buying, selling or merging a business, from diligence through to the transfer.02Advisory & Special ProjectsValuation Support and Business TransferWorkings for a sale, a partner exit or a share transfer, coordinated with practising professionals where a certified valuation is required.03Accounting & FinanceVirtual CFOA Chartered Accountant reading your numbers, planning cash and guiding decisions.04Tax & ComplianceTaxationGST, income tax, TDS, tax planning and notice replies, from reconciled data.