The due diligence process centers around the belief that it is more effective to assess bit by bit all aspect/facets of the dealership operations, internal controls and potential including risk than the business as a whole on 'face-value'.
To illustrate this imagine that you are an automotive mechanic at a workshop down the road. One day Mr Tan drives up and asks you to appraise the general condition of his car so that he can sell it. While seeing the shiny new paint job and hearing about the make of the vehicle, mileage and performance to date will be helpful, it is simply not enough information for you to guarantee that the car will perform well in the future. Would you buy it for you mother?
In order to make that assessment, you will need to evaluate all of the aspects of the car individually. You will check the breaks, test the engine and look at the tires. And then, if each of the cars key parts and processes seem to be in good shape you can conclude that the car as a whole is likely to perform well going forward. If you are able to ascertain information of the service history from records from the authorised servicing dealer before and glance through the service booklet for completion of all the recommended and scheduled service, you can more reliably conclude that the car as a whole is in excellent condition.
This same logic applies to conducting due diligence on companies. Investors that simply look at the type of company, how long it has been around and how it has performed to date will typically not make as reliable judgments about the future viability of the company as an investor who takes a look at all of the individual aspects of a business that are required to create future value.
The process of conducting due diligence forces investors to carefully check the competency of the management, test the strength of customer demand and look at future competitive dynamics. If all of the parts of the company are well oiled, then it is safer to conclude that the company is ready to go the distance.
In summary
Our services is relied upon by the accounting companies, acquirer company and investors for our detailed operational analysis, business performance evaluation including the risk and its scaling
We provide detailed analysis of dealership assets, its revenues, liabilities and risk for valuation purpose, for sale of purchase advice
Our unique strengths lie in our previous experiences and extensive knowledge in the motor industry.
With our expertise in the supplier side of the business, we assist cleints perform due diligence on component supplier, lubricant supplier and logistic handler to ensure that you are getting the best bargain and not the wrong end of the stick.
The multidisciplinary areas of our DD which we focus on are:
- Capitalization
- Management structure
- Revenue, Profit and Margin trends
- Balance sheet items
- Internal controls
- Risk
- Environmental, Legal and Socio-economic impact
- Existing human capital
