Due diligence refers to a series of investigations conducted by the acquirer on the assets and liabilities, operating and financial conditions, legal relations, opportunities and potential risks faced by the target company during the acquisition process. It is an important risk prevention tool in the process of acquisition operation.
In the process of investigation, professional experience and expert resources in management, finance and taxation are usually used to form independent opinions to evaluate the advantages and disadvantages of mergers and acquisitions as decision support for management. The investigation is not limited to reviewing the historical financial situation, but also focuses on assisting the acquirer to reasonably predict the future, which also occurs in the preliminary work of venture capital and public listing of enterprises.