Financial Due Diligence Checklist

Build a financial due diligence checklist for evaluating an acquisition target in [Industry] with [Revenue Range]. Cover: 1) Historical financials (3-5 years) — revenue analysis (growth rate, customer concentration, cohort analysis), gross margin trends, operating expense benchmarking, EBITDA normalization adjustments. 2) Revenue quality — recurring vs one-time, contractual vs at-risk, expansion vs new logo, churn analysis, pricing power assessment. 3) Working capital — receivables aging, payables terms, inventory turns, normalized working capital calculation, seasonal patterns. 4) Debt and obligations — debt schedule, covenant compliance, off-balance-sheet liabilities, contingent liabilities, lease obligations. 5) Tax analysis — effective tax rate analysis, NOL carryforwards, transfer pricing, state/international tax exposure, R&D credit eligibility. 6) Financial projections — management case stress testing, key assumption validation, sensitivity analysis on critical variables. 7) Integration costs — system integration, headcount overlap, facility consolidation, rebranding costs. 8) Deal structure implications — asset vs stock purchase, earnout structuring, working capital adjustment mechanism.