3 DD – Due Diligence

3 DD – Due Diligence


DD stands for Deal Diligence, it is mean an investigation or an audit of potential investment or product to confirm all facts, that may include the review of financial records, Due Diligence refers to the research done before entering into an agreement or a financial transaction with another party.

Deal diligence can take a long time period, it can take 3 – 4 months, somes cases can spend from 1-2 years in fact

Investors performs deal diligence before buying a security from a company, and it can be a reference for the sellers has adequate resources to complete the purchase.

Common examples are in preparation for mergers and acquisitions (M&A) or purchasing new facilities. In order to complete investigation, specialized teams collaborate to compile and review data including

  • Income statements
  • Balance sheets
  • Partnership agreements
  • Existing contracts
  • Profit/loss records
  • Annual reports
  • Tax filings
  • Business and operational practices
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