Financial Due Diligence In The Cannabis SpacePosted by On


Don’t miss this opportunity to connect with THE cannabis movers and shakers from across the globe during Benzinga’s Virtual Cannabis Capital Conference on February 25. Among the attendees is Crowe.

As the cannabis and hemp marketplace continues to mature, more investors have begun to enter the playing field. These groups look at the cannabis space as an opportunity to acquire or merge with businesses that can offer potentially high returns.

But this process is not as simple as it seems.

Sometimes, the true financial picture of a company is not what it is portrayed to be. Companies could report a massive net income, but their operating cash flows may be negative.

An extensive process of verification, investigation or audit of a potential deal or investment opportunity is required to confirm all relevant facts and financial information. This is known as financial due diligence.

During financial transactions, it is also important to learn how a company accumulates its revenues. This report is known as Quality of Earnings (QoE) and is primarily concerned with the income from the core operating activities of a business.

To ensure accurate transactions, there is a need for expertise from independent third-party public accounting firms that offer traditional M&A (merger & acquisition) services — QoE, tax and advisory. These firms can also help smaller companies that want to sell to larger companies. The main objective of the accounting firm…

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Don’t miss this opportunity to connect with THE cannabis movers and shakers from across the globe during Benzinga’s Virtual Cannabis Capital Conference on February 25. Among the attendees is Crowe.

As the cannabis and hemp marketplace continues to mature, more investors have begun to enter the playing field. These groups look at the cannabis space as an opportunity to acquire or merge with businesses that can offer potentially high returns.

But this process is not as simple as it seems.

Sometimes, the true financial picture of a company is not what it is portrayed to be. Companies could report a massive net income, but their operating cash flows may be negative.

An extensive process of verification, investigation or audit of a potential deal or investment opportunity is required to confirm all relevant facts and financial information. This is known as financial due diligence.

During financial transactions, it is also important to learn how a company accumulates its revenues. This report is known as Quality of Earnings (QoE) and is primarily concerned with the income from the core operating activities of a business.

To ensure accurate transactions, there is a need for expertise from independent third-party public accounting firms that offer traditional M&A (merger & acquisition) services — QoE, tax and advisory. These firms can also help smaller companies that want to sell to larger companies. The main objective of the accounting firm…



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