When Conducting Due Diligence on Whether to Purchase a Business

question 91

Multiple Choice

When conducting due diligence on whether to purchase a business, the two most valuable sources of outside assistance are _____ and _____.

• A) customers; suppliers
• B) customers; bankers
• C) accountants; lawyers
• D) vendors; lawyers

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Definitions:

Entity's Risks

Various uncertainties and potential adverse effects that can impact an organization's financial performance or operations.

Past Performance

Historical operational or financial results of an individual or organization, often used as an indicator or benchmark for future potentials.

Operating Segments

Components of an enterprise engaged in business activities from which it may earn revenues and incur expenses, including discrete financial information available.

Gross Margins

The difference between revenue and cost of goods sold, divided by revenue, expressed as a percentage, indicating the efficiency of sales relative to production costs.