Private equity funds invest capital in privately held companies or relevant ownership structures with the aim of generating investment returns. Fund strategies differ in company maturity, sector, geography, control preferences, investment size, governance and the expected period before an exit.
Different financial reviews serve different objectives, from statutory financial statement assurance to internal control evaluation and transaction due diligence. Companies should distinguish the purpose, professional standards and reporting requirements of each engagement before selecting a service.
Fundamental and technical analysis evaluate different kinds of information. Fundamental analysis considers an asset or business’s economic characteristics, while technical analysis studies price, volume and market behaviour. Neither should be treated as a guarantee of future financial performance.
An investment feasibility study evaluates whether a planned project is commercially, operationally and financially viable. It links the intended investment to projected demand, construction or setup costs, operating expenses, working capital and the cash flows needed to support the decision.
Working capital is the difference between current assets and current liabilities. It is a central measure of short-term financial flexibility, but understanding the number requires more than subtracting two figures: managers must also review collections, stock commitments, supplier payments and the cash conversion cycle.