Before someone else examines your numbers
The moment a buyer, seller or investor starts reading your accounts, every judgement in them becomes a negotiation. Far better to have had that argument with yourself first.
Whether you are buying a retail chain, selling your stores, or taking on an investor, the numbers stop being yours the moment someone else starts examining them. Financial due diligence is that examination — and it is far less painful from the side that prepared for it.
Buy-side: what we look for
- Quality of earnings — how much of the reported profit is recurring, and how much is one-off, owner-related or the product of an accounting policy.
- Revenue verification — for retail, tying reported sales to POS and settlement data rather than accepting the P&L. This is where overstated revenue surfaces.
- Normalised working capital — the level the business genuinely needs, which sets the completion mechanism and is one of the most frequently disputed numbers in any deal.
- Off-balance-sheet and contingent items — gratuity provisions understated, lease commitments, guarantees, disputed balances, unfiled tax positions.
- Tax exposure — VAT treatment, Corporate Tax positions, transfer pricing on related-party charges, and whether historic filings hold up.
- Lease and site quality — for retail, remaining term, turnover rent exposure, occupancy ratios by store, and which sites carry the group.
Sell-side: preparing before anyone asks
Sell-side preparation is worth more than most owners expect, because problems found by a buyer become price reductions while problems found early become fixes. That means cleaning up related-party balances, documenting the arm's length basis of owner remuneration and intra-group charges, provisioning gratuity fully, resolving open tax positions, and being able to show store-level performance rather than a consolidated total a buyer will discount for uncertainty.
In retail deals the recurring issue is revenue that cannot be tied to settlement data — aggregator sales booked net in some periods and gross in others, gift cards recognised on sale, or online orders attributed inconsistently between stores. A buyer who cannot reconcile revenue discounts the whole earnings figure, not just the inconsistent part.
Where the transaction needs legal structuring, share purchase agreements or warranty negotiation, that sits with Neo Legal, so the financial and legal workstreams run together rather than in sequence.
Reviewed 18 August 2026 by Ahmed Nabil Selim. UAE tax rates, thresholds and deadlines change — confirm the position for your period before relying on it.
Financial due diligence — frequently asked questions
An assessment of how much of a business's reported profit is genuinely sustainable. It strips out one-off gains and costs, adjusts owner-related items to a market basis, normalises for accounting policy choices, and identifies revenue or costs that will not continue after the transaction. The output is an adjusted EBITDA that both sides can argue about with evidence — which is usually the number the price is built on.
For an owner-managed UAE business with reasonable records, typically three to five weeks from data room access to a final report. Incomplete records extend it substantially and, more importantly, damage the buyer's confidence — a business that cannot answer questions quickly is assumed to have something to find, whether or not it does.
Yes, and it is one of the highest-return pieces of work an owner can commission. Issues you find yourself are fixed at your cost and on your timetable; issues a buyer finds become price adjustments, escrow or warranties. Six months of preparation — provisions corrected, related-party positions documented, tax exposures resolved, store-level reporting established — routinely pays for itself several times over in the negotiation.
Is this your situation?
Tell us how the business is set up and where the numbers currently stand. We will tell you what is required and what it costs to have it handled properly.
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