Financial Due Diligence (FDD): Scope, Process & Key Analyses – PDF

This presentation provides a practical, structured overview of Financial Due Diligence (FDD) – what it is, why it is performed, and how robust conclusions are derived from financial data. It is designed for anyone who wants a clear and actionable understanding of a typical FDD work program, the logic behind normalizations and adjustments, and the key outputs you can expect from an FDD engagement.

It starts by explaining the purpose of FDD: which core questions FDD is meant to answer and how the findings support transaction decision-making. Building on that, it outlines how FDD is typically scoped in practice, including how to select the right focus areas depending on the business model and the quality and availability of data.

The presentation then walks through the core FDD modules commonly performed. This includes an earnings and profitability review with a focus on EBITDA normalization principles, an assessment of cash flow and cash conversion, and a balance sheet review covering typical risk areas. It also explains net debt and working capital concepts, showing how definitions are derived logically and where common pitfalls occur in practice. In addition, it covers the review of budgeting and business planning, including consistency checks and key plausibility validations.

A dedicated section explains adjustment logic in a structured way, covering common categories such as one-off, pro forma, and carve-out adjustments, and showing how these adjustments are documented clearly so conclusions remain transparent and defensible.

Included is a clearly structured slide flow that moves from FDD definition to scoping, analysis modules, adjustment logic, and typical deliverables. For context, it also provides a concise overview of related due diligence workstreams without shifting the focus away from FDD.

This Best Practice includes 1× PDF presentation (32 slides).

The material is ideal for finance professionals who want a solid FDD foundation, junior to mid-level analysts in advisory, corporate finance, or controlling, and anyone preparing for FDD-related workstreams who wants a structured mental model of how FDD is executed and how its conclusions are built.