Due diligence is the Voluntary investigation to evaluate the financial Potentiality before investing in the target company.

The Dictionary definition says

Due diligence is the reasonable steps taken by a person to avoid committing a tort or offense. This is a comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its commercial potential.

Basic Types of Due Diligence

• 1 Financial Due Diligence
• 2 Assets and Liabilities
• 3 Fund Flow and Cash Flow
• 4 Financial Management
• 5 Debt and Ratios

IT (Information Technology) Due Diligence

• 1 IT Systems
• 2 Artificial Intelligence
• 3 Intellectual Property

Legal Due Diligence

• 1 Loan
• 2 Employee related
• 3 Legal Structure
• 4 Various Litigation due diligence
• 5 Assets