Understand what sits behind the earnings.
Which adjustments support the presented earnings? Which income or costs are described as one-off, and why? What evidence supports those adjustments? Ask whether the period is representative and which costs would change under new ownership.
Follow the working-capital questions.
How quickly do customers pay? What inventory is tied up, and what terms do suppliers provide? Are balances seasonal or unusual at the reporting date? Ask for information across periods rather than relying on one convenient snapshot.
Connect the cash needs to the deal structure.
Work with the relevant parties to identify cash needed after completion: maintenance expenditure, committed payments, debt obligations and growth requirements. Bring these findings into the funding discussion and proposed deal terms, with a clear owner for any unresolved amount. Carry the funding plan into integration and review emerging cash requirements as the growth plans develop.
General discussion only. This article is not an assessment or recommendation of any transaction and does not replace engagement-specific professional work.