How Would You Execute Due Diligence? What Areas Could You

question 26

Essay

How would you execute due diligence? What areas could you do yourself? In what areas would you need help, and who would you recruit to assist you?

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Definitions:

Capital Balances

The amounts of money that partners or owners have invested in a business, as recorded in the accounts.

Market Prices

The current price at which an asset or service can be bought or sold in a open and competitive market.

Realization

The process of converting non-cash assets into cash or accounts receivable through sales or other means.

Income Sharing Ratio

The proportion or percentage in which partners in a business agree to distribute the profits and losses among themselves.