Financial DD/high interest rates
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How do companies adapt their financial due diligence practices during periods of high interest rates to mitigate potential risks and optimize their investment decisions?
In periods of high interest rates companies probably put more focus on the financing structure of the company. However, an assessment of the financing structure and the identification of the interest rate risk exposure should be done anyway (also in low interest rate periods)
Hi Sophia,
Financial due diligence needs to be scrutinized in greater detail during times of high interest rates. A keen eye for inflated asset values, inconsistent accounting treatments, and internal control deficiencies is required. This attention to financial due diligence should be done even during times of low interest rates. Uncertainty and risk need to be reflected in the price and financing structure.
Best,
Peter
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