Discovering hidden information:

Due diligence is the process of uncovering scenarios that might not be evident from financial statements. For example:

• Who owns the assets?

• Do any undisclosed liabilities exist?

• Are assets adequately protected by way of patent or trademark where relevant?

• Is the vendor involved in a legal dispute?

• How secure are customer relationships?

• If shares are being purchased, does the vendor have a sound tax compliance history?