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[Company Name] |
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List data: |
Ratings |
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Due Diligence Assessment Model: Scorecard |
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1 |
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[Date] |
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2 |
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3 |
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Gray cells will be calculated for you. You do not need to enter anything in them. |
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4 |
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Rating summary |
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5 |
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Financial performance |
3.0 |
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Brand value |
4.0 |
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Business condition |
2.0 |
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Prospects for the future |
1.0 |
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Competitive environment |
4.0 |
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Human capital |
3.0 |
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Quality of assets |
3.0 |
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Structure of purchase transaction |
5.0 |
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Other risks |
4.0 |
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Total |
29.0 |
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Note: The current due diligence ratings use a scale of 5 as highest and 1 as lowest. You can change the scale to another one, but make sure that it runs lowest to highest down the column H2 though H6. |
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Financial performance |
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Due diligence item |
Due diligence response |
Rating |
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What is the current year profit (loss)? |
The company reported GAAP net income of $2,100,000 with EBITDA of $2,800,000. Based on revenue levels, these figures are acceptable. |
3 |
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What is the previous year profit (loss)? |
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What is the current year revenue? |
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What is the previous year revenue? |
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What is the current year gross margin? |
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What is the previous year gross margin? |
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What is the 3-year revenue growth trend? |
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What is the industry average growth trend? |
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What is the profitability and margin comparison versus the industry? |
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How does revenue growth compare to inflation? |
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Does the company have pricing power? Why or why not? |
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Brand value |
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Due diligence item |
Due diligence response |
Rating |
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Can the brand be leveraged to enter new markets or to resist economic downturns? |
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4 |
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Are a formal custodianship and an organization established to protect the brand? |
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Can the brand be marketed globally? |
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Business condition |
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Due diligence item |
Due diligence response |
Rating |
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What is the current cost of entry into the industry? Is this cost rising or falling, and why? |
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2 |
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Does the need for expensive fixed assets or other large capital expenditures limit our ability to compete? |
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Are inventory and equipment a large part of value? |
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If the business is service oriented, can it hold on to key talent? Why or why not? |
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Is there a strong culture? |
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Prospects for the future |
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Due diligence item |
Due diligence response |
Rating |
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What is the industry outlook? |
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1 |
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Are the products or services differentiating enough? |
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Will the products or services soon be outmoded? |
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If applicable, is the research and development program adequately funded? |
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Is international competition emerging, or is it a current factor within the industry? |
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What is the company's reliance on the overall economic conditions? |
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Competitive environment |
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Due diligence item |
Due diligence response |
Rating |
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How many direct and indirect competitors are there? |
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What is the company's relative standing against its direct competition? |
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Are there specific costs, processes, or technologies that limit competitive entry into the market? |
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Human capital |
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Due diligence item |
Due diligence response |
Rating |
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Do the company's products or services require special skills, education, or licensing? |
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3 |
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Is the work desirable within the job community? |
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Are the environment and the culture considered suitable to the job community? |
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How does the compensation rank versus industry averages? |
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Is there a human resources strategy that promotes employee development? |
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Are basic human resource compliance requirements met? If not, do the exceptions pose material legal risk? |
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Quality of assets |
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Due diligence item |
Due diligence response |
Rating |
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Real estate: Are the location and the facilities suitable for the business? |
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3 |
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Real estate: What is the underlying land value and quality of the title? |
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Machinery and equipment: What is the degree of obsolescence? |
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Machinery and equipment: What are the costs for repairs? What are the costs for deferred purchases? |
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Structure of purchase transaction |
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Due diligence item |
Due diligence response |
Rating |
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Will the purchase of the company be highly leveraged? |
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5 |
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What liabilities need to be assumed? |
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Is the company safely capitalized in its current condition? |
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How do cash flow ratios stack up against the industry and competitors? |
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Other risks |
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Due diligence item |
Due diligence response |
Rating |
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Is the labor unionized? |
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4 |
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Would critical staff remain if the company is sold? |
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What is the general health of key personnel? |
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Are heavy government regulations prevalent in the industry, or is there potential for such regulation? |
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Are customer accounts diversified, or are there a few large accounts upon which revenues are dependent? |
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Are operations unusually susceptible to weather, political events, or other generally uncontrollable events? |
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