Sunday, December 31, 2006

Due Diligence explained.

Online investors are familiar with this word 'Due Diligence'.

Every HYIP monitoring sites and forums do their own due diligence before recommending a program.

According to Merriam-Webster Online dictionary, “Due Diligence” means “the care that a reasonable person exercises under the circumstances to avoid harm to other persons or their property.” It is typically a term used in business transactions for conducting research and analysis of a company or organization during a corporate merger or purchase of securities.

Through due diligence, a prospective buyer/investor gathers detailed information about the business’s operations, financial condition and other factors that must be discovered and analyzed before proceeding with the deal. Due-diligence also enables the seller to evaluate the terms of the sale, the creditworthiness of the buyer, and the tax consequences of how the sale is structured.

Due diligence is an important information gathering process for a prospective purchaser to:
• evaluate the strengths and weaknesses of the target business
• rectify and renegotiate any new terms of agreement
• cancel the deal
• minimize post settlement "surprises"
• determine whether or not to proceed with the acquisition of the target business


There is more to gain knowledge about this very important work and I would suggest you better read it in Genuine answers.

In fact I give credit to them for this article.
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