: The report analyzes key trends in historical revenue, margins, cost drivers, and cash flows to identify the financial narrative of the business and its underlying drivers.
┌────────────────────────────────────────────────────────┐ │ KPMG FDD Analytical Pillars │ ├───────────────────┬───────────────────┬────────────────┤ │ Profitability │ Liquidity │ Stability │ │ ──────────────── │ ──────────────── │ ──────────── │ │ • Quality of │ • Working │ • Customer │ │ Earnings │ Capital Peg │ Retention │ │ • Normalized │ • Debt-Like │ • Cost │ │ EBITDA │ Identities │ Structures │ └───────────────────┴───────────────────┴────────────────┘ The Search for Normalized EBITDA
This section looks back at the past three to five years of sales. It breaks down revenue by product, service, or customer. It shows if the company relies too much on just one big client. How to Use a KPMG PDF as a Template
This is the most critical section for C-suite executives and investment committees. It synthesizes complex financial data into high-impact takeaways, including:
Calculation of Days Sales Outstanding (DSO), Days Inventory Outstanding (DIO), and Days Payable Outstanding (DPO). financial due diligence report kpmg pdf
If you are looking to prepare for an upcoming corporate transaction, please let me know: Are you looking at this from the or the sell-side ? What industry sector is the target company operating in?
Analysis of pricing power, volume trends, customer concentration, and churn rates.
A standard is a comprehensive investigative analysis of a target business's financial health, designed to identify potential "deal breakers" and value drivers for an acquisition.
When a company or private equity firm is considering acquiring a target, KPMG produces a . This report is designed to validate the investment thesis, identify risks that may impact valuation, and highlight deal breakers that should be considered in the Share Purchase Agreement (SPA). KPMG typically performs due diligence before the signing of an SPA, though work can also be conducted after signing when necessary. : The report analyzes key trends in historical
: Analysis of how effectively the business converts profit into cash.
A KPMG Financial Due Diligence report is not merely a box-checking exercise; it is a negotiation tool. By identifying the and calculating a robust "Normalized Working Capital," the report directly influences the final enterprise value. It protects the buyer from overpaying and provides a roadmap for integration and value creation post-close.
KPMG's QoE analysis and working capital assessments directly inform valuation. By identifying adjustments to earnings and normalizing financial statements, the report helps clients determine how much they should pay for the business.
Commercial banks and institutional lenders frequently require a report from a top-tier firm like KPMG before approving acquisition financing. It shows if the company relies too much
You can create a report structure mirroring KPMG’s by reviewing their publicly available (e.g., “Financial Due Diligence Checklist – KPMG” PDF from their site). Combine that with:
A typical FDD report presented in a PDF format by a firm like KPMG is highly structured, designed to highlight potential "deal-breakers" or opportunities for price adjustments.
You cannot download a template. You must engage KPMG’s Deal Advisory practice. The process:
: Evaluation of cash flow patterns, liquidity, and future capital expenditure requirements.
: Assessment of "normal" working capital levels to determine price adjustments at closing.