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MCM Capital Educational Video Series - M&A Financial & Tax Due Diligence Interview

M&A Financial & Tax Due Diligence Interview

We discussed what sellers of businesses should expect from financial and tax due diligence. Justin Thomas from Cohen & Company joined us to discuss the purpose of the exercise, how long it usually takes, treatment of non-business related expenditures, buyside and sellside quality of earnings, common tax issues that arise during M&A transactions, and advice for business owners preparing for financial and tax due diligence.

See below for discussion topics.

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Discussion topics include:

  • What does M&A financial and tax due diligence entail from a seller’s perspective? 1:07
  • What information is requested from a business owner during financial and tax due diligence? 2:23
  • What is the purpose of financial due diligence? 4:30
  • How long does M&A due diligence take? 5:44
  • Who from the business is typically involved in financial and tax due diligence? 6:34
  • How are non-business-related expenditures treated during financial due diligence? 8:33
  • What is a quality of earnings and why are they important? 10:50
  • When is a sell-side quality of earnings recommended? 12:33
  • How much does a sell-side quality of earnings cost? 16:50
  • Does a business using less sophisticated financial reporting software cause issues during financial and tax due diligence? 17:25
  • What if a business owner doesn’t have the answers to financial due diligence questions? 18:30
  • What are common tax issues that could delay or prevent an M&A transaction from closing? 21:11
  • What is one thing business owners could do to prepare for M&A financial and tax due diligence? 23:38