Typical contents and structure (what you’ll find in a KPMG-style FDD PDF)
A financial due diligence (FDD) report is a critical element in modern corporate transactions. When executing mergers, acquisitions, or joint ventures, stakeholders require an objective assessment of a target company’s financial health. KPMG, as one of the Big Four accounting firms, produces widely recognized FDD reports that serve as blueprints for deal valuation, risk mitigation, and post-merger integration.
Identify indebtedness, debt-like items, and unrecorded contingencies. financial due diligence report kpmg pdf
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.
While financial analysis is the core focus, KPMG's integrated approach ensures that legal and tax risks are also identified. This includes reviewing compliance gaps, regulatory adherence, and any pending litigations or legal exposures. Typical contents and structure (what you’ll find in
Analyzing whether volume or price increases are driving growth.
: A diagnosis of the company's financial position, including indebtedness and potential unrecorded contingencies. While financial analysis is the core focus, KPMG's
Inform the drafting of the Share Purchase Agreement (SPA), specifically around net debt definitions and working capital pegs. 2. Structural Framework of a KPMG-Style FDD Report
Identify key financial risks that need immediate management attention post-acquisition. Conclusion
The reports maximize the use of waterfall charts to cleanly illustrate the "bridge" from Management Reported EBITDA to KPMG Adjusted EBITDA.