Due diligence refers to the process of conducting an investigation and analysis of a business or organization before entering into a transaction or contract with it. It involves reviewing financial statements, legal documents, and other relevant information to assess the target’s financial health, legal compliance, and overall condition.
Due diligence plays a critical role in mitigating risks and making informed decisions. It helps identify potential issues, uncover hidden liabilities, and evaluate the target’s overall value. By conducting thorough due diligence, organizations can increase their chances of success in transactions, minimize losses, and protect their interests.