Financial due diligence assesses whether a target company's reported financial performance is sustainable and accurately reflects its underlying business before a transaction proceeds. At CLA Emirates, we provide comprehensive financial due diligence services to acquirers, investors, and lenders across Dubai and the wider UAE. Our reviews focus on key value drivers, including the quality of earnings, normalised working capital, net debt, cash flow, and the reasonableness of management's financial forecasts and underlying assumptions. By identifying financial risks, one-off items, and potential deal adjustments early in the transaction process, we help clients make informed investment and acquisition decisions with confidence.
Financial due diligence
Financial due diligence is an investigation of a target company's historical and current financial position to establish what a buyer is actually acquiring, and what should change in the price or the agreement.
It is not an audit and gives no opinion. The work is analytical and forward-looking: what recurring earnings the business genuinely generates, how much working capital it needs to operate, what debt-like items sit outside reported borrowings, and which contracts or customers the value depends on.
Quality of earnings analysis
A quality of earnings analysis adjusts reported EBITDA for one-off, non-recurring, owner-related and accounting items to arrive at a sustainable, normalised earnings figure.
In UAE mid-market deals the recurring adjustments are owner remuneration and personal expenses, related-party transactions priced off-market, rent below or above market, one-off project margins, and revenue recognised before performance obligations were satisfied. A quality of earnings UAE buyers can defend is usually the single most negotiated schedule in the deal.
Timeline
A focused mid-market diligence typically runs three to six weeks from data room access, depending on the quality of records, group complexity and management availability.
The constraint is rarely our analysis. Incomplete records, unreconciled intercompany balances and slow responses to information requests are what extend timetables, which is why we issue a structured request list on day one and flag deal-critical findings as they emerge rather than at the end.
How our due diligence work supports the deal?
CLA Emirates provides both buy-side and sell-side financial due diligence services across the UAE. Our reports focus on the issues that matter most to a transaction, including quality of earnings, working capital, net debt, financial risks, and forecast assumptions. Findings are prioritised by their impact on valuation, deal terms, and post-transaction integration, with an executive red-flag report issued early to support timely negotiations and informed decision-making.
Core workstreams
- Quality of earnings and normalised EBITDA bridge
- Working capital analysis and the normalised level for completion
- Net debt and debt-like items, including gratuity and lease liabilities
- Revenue and customer concentration analysis
- Related-party transactions and off-market arrangements
- Forecast review and sensitivity of key assumptions
- Tax and VAT exposures identified for specialist review
