DUEDILIGENCE

1、CROEfUfMANAGEMENT GROUPCroesus Man ageme nt Group 2004DUE DILIGENCEQuestionnaireCroesus Management GroupDue Diligence QuestionnaireDue DiligenceQuestionnaireICOMPA NYBACKGROUND(Direct To Managing Director)IGENERAL BACKGROUND1. Please supply the following basic information about the company:a) Histor

2、y of business, any predecessor companies and changes in capital structure, capitalisations or insolvency proceedings.b) Description of products/services, markets, principal customers, subsidiaries and their line of business.c) List of officers and directors, with their affiliations, ages and number

3、of yearsin office.d) Number of people employed and their major areas of activity.e) Capitalisation and share distribution, including the number of shareholders and names of principal shareholders, rights of each class of capital and shareholders agreements.f) Terms of outstanding warrants, options a

4、nd convertible securities.g) Any press clippings and media releases.h) Organisation chart.i) Names, addresses and contact personnel of company s professional advisers, including legal, auditors, principal bankers and investment bankersj) Locations of company s financial and legal records.k) State of

5、 incorporation and date incorporated.l) Key statistics and financial information. .2. If any subsidiaries are not wholly owned, the details of outside ownership.3. Has the company any significant investment in other companies(especially thosecarried on the balance sheet under the equity method of ac

6、counting).4. What aspects of the business appear to be dominant in the industry (eg technology,product design, marketing). What factors make the company more attractive than other companies in the industry?5. How can the company maintain a competitive advantage over other companies?6. Have any of th

7、e company s officers or director s been involved in criminal proceedings, regulatory violations or significant litigation.7. Any information regarding:a) The image of the company and its products and services compared to thoseof industry leaders.b) The reputation of present owners, directors, manage

8、ment and professional advisers.c) The trend of market share.d) Recent major developments among competitors.e) The extent of government or other regulation under which the company operates.f) Other external factors affecting the company, such as, the impact of a significant change in economic conditi

9、ons.g) New developments, planned or in progress, including:? Industry programs affecting the company s position in the industry? Capital equipment needs and commitments.h) Special skills and advantages, such as:? Technical position? Market dominance? Cost structures? Management/employee capabilities

10、i) Major litigation, pending or potential.j) Cyclical factors affecting the industry.k) Credit rating. .l) Major operations discontinued in recent years or that may be discontinued inthe near future.m) Contracts and leases nearing expiration.n) Labour negotiations pending.o) Trade association member

11、ship.p) International trends in similar industries.q) Major customers.r) Major suppliers.Croesus Management Group 20044Croesus Management GroupDue Diligence QuestionnaireDue Diligence QuestionnaireIIManagement&CONTROL(Direct To General Manager )II MANAGEMENT & CONTROLManagement Approach1. What would

12、 you say is the basic approach of management (eg. entrepreneurial, authoritative, management-by-objectives) and the extent of centralisation or decentralisation of authority?2. Is the company well structured overall to best meeting the requirements of each area for management and supervision, eg. by

13、 activity, product, service, function, location.3. To what extent could management be integrated or permitted to operate autonomously.4. Will existing management remain in the employ of the company.5. Set out the record of the management team as a whole, including:a) The success of the company relat

14、ive to the industry.b) Whether the success of the company can be attributed to good management or a good market and industry.c) The strategies that management is using to increase market share and profitability.d) The intelligence demonstrated in taking advantage of anticipated changes in the market

15、place and environment.e) The work environment that management has created in the company. Is the management as small in scale and as low in cost as possible.f) Does management work as an integrated unit or is it constantly dealing with crises and emergencies? Integrated and cohesiveg) Are the right

16、decisions being made at the right level of the organisation?6. How would you rate the effectiveness of basic concepts and tools of good management, including:a) Documented objectives.b) Strategic and tactical plansc) Responsive organisational structures and .d) Effective policies and procedures.e) A

17、dequate management information systems.f) Budgetary control and responsibilityg) Standards of performance and control.h) Management and manpower development.Planning7. Outline:a) The company s attitude towards the planning process, annual and long -term.b) Whether plans are well thought out.c) Wheth

18、er plans and budgets are effective management tools8. Who in the organisation is responsible for long-range plans and are the plansdocumented and communicated to the people responsible for implementing them?9. Describe whether:a) In the budgeting process, the sales forecasts are based on real assess

19、ments of the market, rather than on percentage increases. How are costs estimated and how far down the company does the budgeting process extend?b) Budgets embody realistic assumptions of the availability of manpower, productive capacity and working capital.c) Long-term plans are integrated with cap

20、ital budgeting and financial planning.d) Long-term plans reflect competitive reactions.e) These plans include alternative strategies.10. State whether:a) Objectives are described so achievement can be monitored.b) Senior management assess operating personnel in working toward and achieving specified

21、 objectives.c) The company has a history of meeting its goals.d) The budgeting and internal accounting functions are integrated so that actual performance is reported on the same basis and under the same assumptions as the budgets were prepared.e) Actual is compared to budget, and if there is a form

22、al procedure for documenting variances.f) Actual financial results are used periodically to update budgets and revise the annual or quarterly financial projections.11. Describe the procedures used to monitor the marketplace, such as:a) Market share.b) Activities of competitors.c) Attitudes of custom

23、ers.Internal Controls12. Set out the extent to which these basic elements of control operate within the organisation.a) The duties and responsibilities within the company are organised to provide adequate segregation of duties.b) The authority and responsibility of each function and person is clearl

24、y defined in a job description and understood by each person.c) There is an adequate accounting system that provides control over all assets and transactions.d) There are documented statements of policies and procedures.13. Identify any cost reduction or profit improvement programs. On-going review

25、of all facets of financial management.Croesus Management Group 20048Croesus Management GroupDue Diligence QuestionnaireDue DiligenceQuestionnaireIIIINDUSTRY&COMPETITORS(Direct To Marketing Manager )Markets1. What is the demand for end product from the company?2. Are customers individuals or corporat

26、e?3. Is the company s market new?4. Does the company rely entirely on export or import markets?5. Analyse factors affecting demand, including:a) Environmental issues.b) General business conditions.c) Population changes.d) New services, product changes or technological innovation.e) Advertising or pr

27、omotional pressure.f) Governmental factors.g) Customer growth.h) Ecological considerations.6. Is the market for the company s products entirely a function of the company s abilitsell?7. Describe market segments:? Type of customer? Geographic location? Product/service? Channel of distribution? Pricin

28、g policy8. Analyse sales patterns and shifts.9. Set out the record of sales performance.10. Project growth/contraction trends.11. Supply a forecast of sales expectations and estimated share of market.12. Give an est imate of the company s ability to supply present and anticipated demand.13. Review s

29、ales backlog, accounts receivable, sales correspondence and customer continuity.14. Analyse present and probable pricing policies for services, considering:a) The sensitivity of both the industry and company to price changes.b) Whether there is a price leader.c) Whether there is price-cutting.d) Any

30、 excess capacity in the industry that might tend to depress prices.e) Whether the company has been able to pass along recent cost increases to customers.f) Regulatory factors, such as, the Australian Competition and Consumer Commission.g) Possible loss of customers.h) Whether there is a disproportio

31、nate level or type of sales to a number of customers eg. a high percentage of sales made to a few customers.15. Assess advertising media and other sales promotion programs for cost and effectiveness.16. Review trends in the major elements of marketing, including:a) Market forecasts compared to actua

32、ls.b) Sales cancellations and the reasons for them.c) Departmental costs compared to budget.d) Sales and expenses per salesman.e) Customer service costs.f) Shift in product mix profitability.g) Order processing costs.h) Customer complaints and loss of customers.i) Discount pattern by customer groupi

33、ngs.j) New accounts opened.17. Analyse the industry csomposition and, in particular, recent changes in that composition, considering:a) The number of companies that operate in this industry and whether that number has been declining or increasing.b) The recent merger, acquisition and divestiture dea

34、ls that have occurred in the industry.c) The trends in the prices paid for these deals.d) Recent company closings or openings or announcements of such.e) The degree to which foreign companies are entering this market, possibly through joint ventures.f) The number of market leaders or specialists in

35、this industry and whether they have diversified into other businesses.g) Whether the industry has significant over/under capacity.18. Outline the factors critical to success in this industry by considering:a) The industry leaders and reasons for their success.b) The principal bases of competition:?

36、Price? Service? Quality? Innovation19. Determine the extent to which external factors influence the industry s health:a) Existing or pending litigation.b) Governmental regulations, such as Trade Practices Act, ACCC or surveillance bodies, tariffs.c) Environmental issues.d) Any potential adverse poli

37、tical, social or economic conditions.e) The existence and power of any industry lobby groups.Croesus Management Group 200412Croesus Management GroupDue Diligence QuestionnaireDue DiligenceQuestionnaireIVHuman Resources(DIRECT TO Human RESOURCES MANAGER )IV HUMAN RESOURCES1. Supply details of the num

38、ber of employees by sex and age, grouped into operatingactivity and approximate total wage or salary cost of each category.2. Outline all union affiliations and contracts for significant agreements, including industrial awards.3. Identify what labour unions are represented in the industry and the Co

39、mpany.4. What are the average pay scale and fringe benefits for employees?5. Overview the industrial relations history for the past five years.6. Are there any formal cases pending and how have similar cases been resolved inthe past.7. Outline the incentive system, average rates (incentive and hourl

40、y), the date they were established and date of the last updating of standards.8. Describe:a) Labour morale and the handling of labour relations.b) Working conditions, statistics on staff turnover and reasons for it.c) Employment, recruiting and personal policies and procedures.d) Accident frequency

41、and safety inspection reports.e) Medical problems and sick leave.f) The wage and salary administration system.g) Training programs and apprenticeships systems.h) The productivity of the labour force.i) Any unfilled positions.j) The cost and effectiveness of the personnel department.9. Overview the g

42、eneral labour market, including:a) The types of skills available in the area.b) Current pay rates and personnel practices of the industry and of other companies operating in the immediate area.c) Area transportation, community recreation facilities, housing and schools.10. Supply information on mana

43、gement personnel, such as:a) The organisation of management functions and responsibilities.b) Management and key employees, including position, career path, age, compensation, retention outlook and management training received.c) The terms of any employee service agreements or whether unwritten unde

44、rstandings exist.d) Any replacement candidates for present management.e) Recent key personnel losses to competitors.f) The character and attitude of the key personnel.g) Whether there has been a recent major “ turnover in”key staff or whether these personnel are“ stable ”.11. In evaluating employee

45、benefit programs, please provide:a) The details and costs of pensions, post-retirement benefits, profit sharing, life insurance, disability insurance, medical benefits, travel, accident bonus, deferred compensation and severance plans.b) Whether superannuation funds are presently over-undertraded (a

46、s determined by most recently conducted actuarial valuation) and whether the performance of fund managers is satisfactory.c) Benefits and salary levels compared with those of other companies. Does the company need to upgrade its benefit programs or salaries? If so, estimate the cost.d) Vacation and

47、sick pay policies.e) The number and average cost of company-provided cars.f) Employee share ownership schemes including any share option, share bonus or partly paid share plans. How is the efficacy of the scheme judged and what are estimated resulting costs?12. State whether there are any outstandin

48、g claims, such as, sexual discrimination, illness, negligence, workers compensation.Croesus Management Group 200415Croesus Management GroupDue Diligence QuestionnaireDUE DILIGENCEQuestionnaireVOperations(Direct To Operations Manager )V Proposed And Existing OperationsPla nt and Facilities1. Please s

49、upply in formati on on:a) Locati on and descripti on of pla nt and property.b) Proximity to tran sportati on facilities, materials sources.c) Descripti on of the area, in clud ing climate and n atural hazards.d) Restricti ons imposed by build ing costs and zoning laws.e) Utilities, in cludi ng avail

50、ability, usage and rates.f) Property taxes and other fixed costs.g) Title to property.h) The adequacy of in sura nee coverage.i) Any lie ns or actual or pote ntial condemn ati on proceed in gs.2. Also supply land in formati on, in cludi ng:a) Size.b) Cost.c) Assessed value and fair market (appraised

51、) value.d) Curre nt and possible future use and value.3. Please supply buildi ng in formati on, in cludi ng:a) Descripti on, pictures and curre nt use.b) Cost, accumulated depreciation and depreciation rates and policies (or lease terms).c) Assessed and fair market (appraised) value.4. Supply mach i

52、nery and equipme nt in formati on, in clud ing:a) A list of principal machinery and equipment showing cost, age and condition, accumulated depreciati on, l ocati on and departme ntal use.Croesus Man ageme nt Group 200417Croesus Management GroupDue Diligence Questionnaireb) Depreciation rates and pol

53、icies (or lease terms). Refer Asset register and depreciation schedules - financialsc) Lead times established, by product and vendor.a) Formalised make-or-buy analyses.b) Commodity specific.c) Price standards and variance accounting.5. Identify if there is any concentration of purchases of any items

54、 from individual vendors.6. Review operating information and trends for the purchasing department, including:a) Trend of cash discounts earned.b) Operating costs compared to budgetc) Waste, scrap and salvage disposals.d) Rejection of material on incoming inspections.Inventories and Costing7. Supply

55、information on:a) Trends in inventory levels by reporting category.b) Stratification by value of fast-moving, slow-moving, excess and obsolete inventory.c) Seasonal inventory fluctuations.d) Inventory turnover by product line, in line of business, division or subsidiary.e) Basis of valuation (eg. FI

56、FO, average costs).f) Trends in customer service levels.g) Sales and write-offs of obsolete stock over the past few years.h) Inventories of plant, equipment, parts.i) Returnable packages, sacks, containers, and pallets.j) Arrangements for and experience with inventory held by others, whether under c

57、onsignment or otherwise.k) Extent of any“ field warehousing ” financing activity.8. For cost accounting procedures, explain:a) Whether the cost system is job cost of process cost.b) The costs that are included in overhead.c) Whether unfavourable volume variances from idle plant overstate inventory unit costs.d) How overhead is distributed.e) Whether standard costs are used, and how under and over-absorbed costs are allocated to inventory and cost of sales.f) In ascerta