[Make A Copy] Acquisition Diligence Checklist

	A	B	C	D	E	F	G	H
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2	Due Diligence Checklist This checklist contains some of the most common items related to evaluating the merits of a potential acquisition.
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4	Financial		Relevant?	Who is Responsible?	Date Requested	Date Received	Reviewed	Comments / Notes
5	Annual & Quarterly Finanials
6		Income statements, balance sheets, cash flow statements (prepared under both the cash and accrual method) for the past three years
7		Year to date (YTD) income statements, balance sheets, cash flow statements (prepared under both the cash and accrual method) for the past three years
8		Last 12 months (LTM) income statements, balance sheets, cash flow statements (prepared under both the cash and accrual method)
9		Breakdown of sales and gross profits by: Product, Service, Customer, Geography, Sales Channel
10		Current backlog and work in progress
11		Trial balance and general ledger statements
12		Copies of the company’s tax returns, both federal and state, including the regular federal depreciation schedules for the past three years
13		Copies of all federal payroll tax returns for the past three years
14		Copies of all bank statements for the current and past three years
15		List of adjustments to cash flow and/or earnings before interest, taxes, depreciation and amortization (EBITDA) with supporting documentation
16		Copy of QuickBooks file with user ID and password allowing full access
17		Planned vs. actual results
18		Management financial reports
19	Financial Projections
20		Quarterly financial projections for the next fiscal year
21		Major growth drivers and prospects
22		Industry and company pricing policies
23		Economic assumptions underlying projections
24		Any capital expenditures and/or changes to working capital planned or anticipated in the next 36 months.
25	Budgeting Process
26		Describe the budget process
27		Discuss historical forecast accuracy, where deviations have occurred, and why
28	Capital Structure
29		List of all shareholders with description of ownership interests
30		Description of any potentially dilutive securities, including vesting provisions and exercise prices
31		Summary of all debt instruments, bank lines, and loan agreements with key terms and conditions
32	Other Financial Information
33		Accounts receivable aging report
34		Accounts payable reporting
35		Discussion of general accounting policies (revenue recognition, etc.)
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37	Products & Services		Relevant?	Who is Responsible?	Date Requested	Date Received	Reviewed	Comments / Notes
38	Product/Service Description
39		List of current product/service offerings broken down by price, total number of units (with percentage of sales), and average margins
40		Projected sales by product/service for current year and next fiscal year
41		Key competitors for each product/service
42		Key applications of current products/services, and potential additional applications
43		Major customers and markets for each product/service
44		Historical and projected growth rates
45		Market share
46		Cost structure and profitability
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48	Customers		Relevant?	Who is Responsible?	Date Requested	Date Received	Reviewed	Comments / Notes
49		List of top 10 customers for the past three fiscal years and current YTD
50		List of strategic relationships
51		Revenue by customer
52		Description of any significant customer relationships terminated in the last 36 months
53		Any other relevant customer information
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55	Operations		Relevant?	Who is Responsible?	Date Requested	Date Received	Reviewed	Comments / Notes
56	Supply Chain
57		List of critical suppliers
58		Contracts and purchase agreements in place (terms, duration, obligations, protections, etc.)
59	Manufacturing
60		Current utilization
61		Identifiable bottlenecks
62		Flow rate/flow time
63		Areas for automation
64	Warehouse, Logistics, & Returns
65		Inventory management
66		Returns/warranty claims as a percent of sales
67	Physical Assets
68		List of all furniture and fixtures, including age and current value
69		List of all tools and equipment, including age and current value
70		List of all vehicles, including age, VIN numbers, and current value
71		General description of standard employee’s laptop and/or desktop computer, (including hardware configuration, operating system, and installed software)
72		Exceptions (list of essential items being used in the business that will not be included in the sale)
73	IT Systems & Service Providers
74		Details of all key IT systems utilized, including design, accounting, inventory management, salesforce, and customer databases
75		List of all service providers (e.g. telecommunications, internet, web hosting, office equipment, SaaS, accounting, payroll, IT support, shipping, advertising), including current leases and contracts
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77	Management & Employees		Relevant?	Who is Responsible?	Date Requested	Date Received	Reviewed	Comments / Notes
78		Organizational chart
79		Historical and projected headcount by function and location
80		Summary biographies of senior management and key employees, including employment history, age, service with the Company, and years in current position
81		List of any family members or relatives working for the Company and their annual salary paid for the past three years and current year.
82		W-2s for all employees (including owners and family) for the current and last three years
83	Compensation
84		Overview of program for senior managers
85		Copies (or summaries) of key employment agreements
86		Employee benefits plans (health, dental, vision, life, and retirement)
87		Incentive stock plan
88		Profit sharing plan
89		Performance evaluation system
90		Significant employee relations problems, past or present
91	Personnel
92		Personell turnover data for the last two years
93		Benefit plans
94		Background and/or immigration checks
95		List of any outstanding employee loans
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97	Marketing, Sales, & Distribution		Relevant?	Who is Responsible?	Date Requested	Date Received	Reviewed	Comments / Notes
98	Strategy & Implementation
99		Description of domestic and international distribution channels
100		Positioning of the Company and its products/services