Revenue from a discontinued product line or a legal settlement.
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Using a language that lenders and boards of directors understand. Revenue from a discontinued product line or a
Costs run through the business by owners (common in private firms). Learn more Using a language that lenders and
The report will calculate a "Target Working Capital." This prevents the seller from depleting inventory or stretching payables right before the sale to harvest extra cash. 5. Net Debt and Debt-Like Items
Ultimately, a financial due diligence report is a negotiation tool. If KPMG identifies $1M in "non-recurring" revenue, the buyer may be able to argue for a significant reduction in the purchase price based on the agreed-upon valuation multiple.
This is the most critical section for stakeholders. It highlights: