Due Diligence
The comprehensive appraisal of a business undertaken by a prospective buyer, particularly to establish its assets and liabilities and evaluate its commercial potential.
Implications
The comprehensive appraisal of a business or investment, typically conducted before a transaction such as a merger, acquisition, or investment, to assess risks, validate financials, and ensure that all relevant aspects are understood by the parties involved.
Example
Example: Before acquiring a smaller competitor, a healthcare company conducts due diligence, reviewing financial statements, legal contracts, and regulatory compliance to ensure there are no hidden liabilities.
Related Terms
Different from a simple review, due diligence is an in-depth process that often involves multiple aspects of the business, including financials, operations, legal issues, and market position.
Get INSTANT comprehensive market research of any industry
Chat with AII Consultant Now!
