Types of due diligence

Legal Due Diligence: This looks at different legal aspects important for the target company, like contracts, intellectual property, history of litigation, compliance with laws, and employee agreements. The goal is to find any legal issues, risks, or obstacles that could affect the acquisition. Financial Due Diligence: Here, the focus is on a deep dive into a company's financial stability, risks, and opportunities. It reveals the true financial health of a company, starting with a review of financial statements—the income statement, balance sheet, and cash flow—to check the accuracy and sustainability of earnings.