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Consulting Glossary

Due Diligence

A comprehensive investigation of a business before a transaction or significant commitment.

Due Diligence
Due diligence is the structured process of investigating and verifying all material facts about a business, asset, or situation before completing a transaction, investment, or strategic commitment. It typically encompasses commercial, financial, legal, operational, and sometimes environmental and technical workstreams.

In Consulting

How Due Diligence Is Used in Practice

Commercial due diligence (CDD) is the workstream that consulting firms lead — assessing the strategic rationale of a target, the quality and sustainability of its revenue, the competitive dynamics of its markets, and the realism of its financial projections. CDD is commissioned by PE funds, corporate buyers, and sometimes lenders to gain an independent view of the target business from a market and commercial perspective.

Related Services

Where Karter McKinley Applies This

M&A Advisory
We advise buyers, sellers, and investors across the full deal lifecycle — origination, due diligence, structuring, and post-merger integration.
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Financial & Investment Advisory
We advise on capital structure, investment strategy, and financial performance — helping organisations raise capital, deploy it intelligently, and manage risk.
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FAQ

Frequently Asked Questions about Due Diligence

What is the difference between commercial and financial due diligence?
Financial due diligence examines the quality of reported earnings, balance sheet items, and cash flow. Commercial due diligence examines the business from a market perspective — whether its competitive position is sustainable, whether the market is growing, and whether management's projections are realistic. Both are usually conducted simultaneously by different advisory teams.
How long does due diligence take?
For a typical mid-market transaction, commercial and financial due diligence each take 4–8 weeks from data room access to final report. Accelerated processes for competitive bid situations can compress timelines to 2–3 weeks, with proportionate risk.

Related Terms

Also in Our Consulting Glossary

EBITDA
Earnings Before Interest, Taxes, Depreciation, and Amortisation — a core measure of operating profitability.
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Mergers & Acquisitions (M&A)
Transactions in which companies are consolidated — through mergers, acquisitions, divestitures, or buyouts.
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Private Equity
Investment in private (non-publicly traded) companies, typically through structured funds with defined investment periods.
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