Financial Due Diligence

Independent Financial Assessment for Transactions, Investments, and Strategic Decisions

Financial due diligence is a critical step in assessing the financial health and sustainability of a business before entering into a transaction or strategic partnership. At BDO Malta, we provide independent financial due diligence services to support clients involved in mergers, acquisitions, investments, and restructuring. 

Our work focuses on delivering a clear picture of a company’s financial position, historical performance, and future obligations, helping stakeholders make informed and measured decisions. 

When is Financial Due Diligence Required?

• Buying or selling a business 
• Mergers and joint ventures 
• Attracting investors or private equity 
• Restructuring or refinancing 
• Management buyouts or shareholder exits 

What We Deliver 

Analysis of Financial Performance 

We review historical financial statements, as well as future cash flow projections, identify underlying earnings, and adjust for one-off or non-operating items to present a more accurate picture of ongoing performance. 

• Assessment of revenue quality and profitability 
• Evaluation of cost structures and fixed vs. variable expenses 
• Review of cash flow generation and working capital requirements 

Quality of Earnings Review 

Understanding the sustainability of earnings is vital when evaluating a business. We assess: 

• Recurring vs. non-recurring income and expenses 
• Normalisation adjustments 
• Seasonal and cyclical effects on earnings

Balance Sheet Review 

We evaluate the balance sheet for hidden liabilities or overvalued assets. This includes: 

• Working capital position and trends 
• Debt and contingent liabilities 
• Asset realisability and provisions 

Cash Flow and Liquidity Analysis 

We review historic and projected cash flows to assess the business’s ability to fund operations, repay debt, or support growth. 

Review of Accounting Policies and Practices 

• Assessment of accounting policies and whether they are applied consistently 
• Identification of any aggressive or unusual accounting treatments 
• Comparison against local and international standards (e.g. GAPSME or IFRS) 

Tax and Regulatory Considerations 

Working with our tax team, we identify any tax exposures or compliance issues that may impact the financial position of the target. 

Why BDO Malta? 

• Independent Analysis – We provide objective and impartial findings to support your decision-making 
• Cross-Functional Support – Access to tax, legal, and advisory teams when a broader view is required 
• Sector Experience – Our team has experience across a range of industries, including regulated sectors 
• Transaction Readiness – We help clients understand financial risks and value drivers before committing to a deal 

A well-executed financial due diligence process provides the insight and assurance needed for a successful transaction.

To learn how BDO Malta can support your transaction with financial due diligence, contact us today.