Financial and Tax Due Diligence

Financial and Tax Due Diligence

Investigating business and assessing risks before making deals.

Investigating business and assessing risks before making deals.

Financial due diligence (Buy-side) 

This service involves an investigative analysis of a business, assessing the key issues facing the business and the drivers behind maintainable profits and cash flows, identifying the key financial risks and potential deal breakers of the transaction.

Our approach aims to identify the value created by the transaction, including analysis of:

  • Actual earnings (identification of one-off events and sustainable earnings);
  • Financial projections;
  • Cash flow generators;
  • Capital expenditure;
  • Working capital;
  • Management information, system and controls environments;
  • Employment issues;
  • Commitments and contingent liabilities that might endanger financial performance or otherwise adversely affect the target's financial position after the transaction. 

Our work may relate to an acquisition of the shares in a company or its assets (or a group of assets) as well as the organised part of the enterprise. We conduct our projects in close cooperation with our clients and the investor’s other advisers, which enables us to achieve complete understanding of investors’ expectations and provide high-quality deliverables. 

Tax due diligence (Buy-side) 

Our experience indicates that identified tax risks can have a significant impact on the market value of the target company and might constitute a crucial argument in price negotiation process. The aim of the tax due diligence is the analysis of the target’s tax treatment in respect of its consistency with Lithuanian tax regulations, legislation of the administrative courts and the instructions issued by the Ministry of Finance of the Republic of Lithuania. Our services in respect of tax due diligence include, in particular, analysis of the target’s tax settlements and social security contributions in order to identify tax risks and analysis of decisions concerning historical tax controls undertaken by relevant authorities.

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