Financial and Tax Due Diligence

Financial Due Diligence provides information to managers and investors about the company's ability to generate future cash flow, based on analysis of historical financial performance, as well as future opportunities. Due Diligence procedures are meant to disclose information regarding sufficiency of working capital,  seasonal fluctuations in working capital, cash flow coverage, quality of earnings, profit margins, operational cash flow and risk assessment.  Due Diligence procedures also disclosure information regarding the company’s financial and internal control systems, middle and long term financial plans and forecasts. Projections and forecasts are analyzed based of financial information of the past and assumptions used for financial planning. A Due Diligence report is used as a tool to adjust valuation based on information about cash availability, working capital, risk and tax provisions.

 

Tax Due Diligence assesses the company’s tax position and tax load, and assesses risks  related to applied tax system. In addition Tax Due Diligence reveals tax avoidance schemes. The Ukrainian tax system is far from transparent. In some cases possible tax liability could be drawn from careful analysis of the tax audit provided by the tax authority, and associated correspondence. We will help you to asses and minimize risks related to tax issues raised by the company’s tax system, as well as Ukrainian tax legislation. Our tax specialists will advise you not only about risks but develop an action plan designed to mitigate risks. We will also recommend provisions and covenants that should be included in the sales purchase agreement (SPA), as well as warranties required from the seller.