Concept and content of 1. commercial due diligence

Commercial due diligence refers to the process of conducting a comprehensive, in-depth and objective investigation and evaluation of the market, finance, law, technology and management of the target enterprise or project before making major business decisions such as investment, merger and acquisition, cooperation, etc., in order to determine its value, risk and potential, and to provide basis and suggestions for decision-making. Business due diligence is an important part of enterprise strategic management and the core content of enterprise risk management. The purpose of commercial due diligence is to protect the interests of investors, avoid or reduce the possibility of investment failure, and improve the rate of return on investment.

The content and methods of commercial due diligence vary according to different industries, markets, goals and objectives, but generally include the following aspects:

-Market due diligence. Market due diligence refers to the investigation and evaluation of the market environment, market scale, market structure, market demand, market competition and market risk of the target enterprise or project, so as to understand the market position, market potential, market advantage and market risk of the target enterprise or project, and provide market basis and market suggestions for decision-making. There are several main methods of market due diligence: industry analysis, market research, competitive analysis, SWOT analysis, PEST analysis, etc.

-Financial due diligence. Financial due diligence refers to the investigation and evaluation of the financial situation, financial statements, financial indicators and financial risks of the target enterprise or project in order to understand the financial strength, financial benefits and financial risks of the target enterprise or project, and to provide financial basis and financial advice for decision-making. There are several methods of financial due diligence: financial statement analysis, financial ratio analysis, financial forecast analysis, financial risk analysis, financial adjustment analysis, etc.

-Legal due diligence. Legal due diligence refers to the investigation and evaluation of the legal status, legal documents, legal compliance and legal risks of the target enterprise or project in order to understand the legal status, legal rights, legal obligations and legal risks of the target enterprise or project, and to provide legal basis and legal advice for decision-making. There are several main methods of legal due diligence: legal document review, legal compliance review, legal risk review, legal opinion, etc.

-Technical due diligence. Technical due diligence refers to the investigation and evaluation of the technical status, technical level, technological innovation and technical risks of the target enterprise or project, so as to understand the technical advantages, technical potential and technical risks of the target enterprise or project, and provide technical basis and technical suggestions for decision-making. The methods of technical due diligence are as follows: technical document review, technical expert interview, technical test evaluation, technical patent analysis, etc.

-Management due diligence. Management due diligence refers to the investigation and evaluation of the management status, management team, management system and management risk of the target enterprise or project, so as to understand the management ability, management efficiency and management risk of the target enterprise or project, and provide management basis and management suggestions for decision-making. There are several main methods of management due diligence: management team review, management system review, management process review, management performance review, etc.

The difficulties and challenges of commercial due diligence are as follows:

-Acquisition and verification of information. The acquisition and verification of information is the basis and premise of commercial due diligence, and it is also one of the difficulties of commercial due diligence. The information of the target enterprise or project may be scattered in multiple channels, multiple levels, multiple departments, multiple personnel, etc., and the team needs to collect, sort out, verify and screen through various ways, means and angles to ensure the authenticity, completeness, accuracy and timeliness of the information. The difficulty of obtaining and verifying information is affected by the following factors: the sensitivity of the information, the complexity of the information, the reliability of the information, the accessibility of the information, etc.

-Analysis and interpretation of information. The analysis and interpretation of information is the core and key of business due diligence, and it is also one of the difficulties of business due diligence. The information of the target enterprise or project may involve multiple aspects, multiple dimensions, multiple indicators, multiple factors, etc., and the team needs to analyze, interpret, evaluate, infer, etc. through multiple methods, multiple tools, and multiple logics to reveal the connotation, extension, connection, and impact of the information. The difficulty of analyzing and interpreting information is influenced by several factors: the diversity of information, the relevance of information, the consistency of information, and the interpretability of information.

-Integration and presentation of information. The integration and presentation of information is the result and output of business due diligence, and it is also one of the difficulties of business due diligence. The information of the target enterprise or project may come from multiple channels, multiple levels, multiple departments, multiple personnel, etc., and the team needs to be adjusted to integrate, present, report, and recommend through multiple methods, multiple forms, and multiple languages. To convey the meaning, value, risk, potential, etc. of the information. The difficulty of information integration and presentation is affected by the following factors: the magnitude of information, the structure of information, the expression of information, and the comprehensibility of information.

-Utilization and application of information. The use and application of information is the purpose and value of business due diligence, and it is also one of the difficulties of business due diligence. The information of the target enterprise or project may involve multiple aspects, multiple dimensions, multiple indicators, multiple factors, etc., which need to be used and applied by teams and decision makers through multiple thinking, multiple judgments, multiple decisions, and multiple actions, so as to realize the transformation of information, the realization of value, the avoidance of risks, the development of potential, etc. The difficulty of using and applying information is influenced by several factors: the applicability of information, the operability of information, the enforceability of information, the feedback of information, and so on.

Concept and content of 2. risk assessment and plan development

Risk assessment and plan formulation refers to the process of identifying, analyzing, evaluating and controlling various risks that may arise in the process of commercial due diligence, and formulating corresponding countermeasures and plans according to different risk situations to deal with market, finance, The process of uncertainty and variability in legal, technical and management aspects to ensure the smooth implementation of business decisions and the safe recovery of investments. Risk assessment and plan development are an important part of commercial due diligence, as well as an extension and deepening of commercial due diligence. The purpose of risk assessment and planning is to improve the quality and depth of commercial due diligence, as well as the application and implementation of commercial due diligence.

The contents and methods of risk assessment and plan development vary according to different industries, markets, goals and objectives, but generally include the following aspects:

-Risk identification. Risk identification refers to the collection, collation, classification and induction of various factors that may affect the value, risk and potential of the target enterprise or project in the process of commercial due diligence, so as to determine the type, source, scope and degree of various risks that may arise, and provide the basis and input for risk analysis and evaluation. The main methods of risk identification are as follows: risk list method, risk factor method, risk matrix method, risk identification chart method and so on.

-Risk analysis. Risk analysis refers to the qualitative and quantitative analysis of the identified risks in the process of commercial due diligence to determine the probability of occurrence, degree of impact, scope of impact, direction of impact, etc., to provide the basis and output for risk assessment and control. The main methods of risk analysis are as follows: risk sensitivity analysis, risk decision tree analysis, risk Monte Carlo simulation analysis, risk fault tree analysis and so on.

-Risk assessment. Risk assessment refers to the comprehensive and comparative assessment of the various risks that have been analyzed in the process of commercial due diligence to determine the importance, priority, acceptability, controllability, etc. of various risks, and to provide reference and suggestions for risk control and plan formulation. The methods of risk assessment are as follows: risk hotspot map method, risk scoring method, risk index method, risk level analysis method and so on.

-Risk control. Risk control refers to the effective and timely control of various risks that have been assessed in the process of business due diligence, so as to reduce or eliminate the probability and impact of various risks, improve or maintain the value of the target enterprise or project, The balance and stability of risk and potential provide guarantee and support for the success of business decisions and the safety of investment. The main methods of risk control are as follows: risk aversion, risk transfer, risk mitigation, risk taking and so on.

-Preplan development. Preplan formulation refers to the formulation of corresponding countermeasures and plans according to different risk situations and risk control strategies in the process of commercial due diligence to deal with various risks and changes that may arise, and to ensure the smooth implementation of business decisions and the safe recovery of investments. The main methods of plan formulation are as follows: plan type method, plan level method, plan preparation method, plan implementation method and so on.

Methods and processes for risk assessment and pre-planning of 3. Champ Consulting.

Shangpu Consulting is a company specializing in business due diligence consulting services. It has rich industry knowledge, market experience, data resources, expert team, analysis methods, tool platform, etc., and can provide customers with all-round, multi-dimensional and high-quality Business due diligence consulting services help customers fully understand the market, finance, law, technology, management and other aspects of the target company or project, assess its value, risk and potential, formulate reasonable, effective and feasible business decision-making plans, avoid or reduce investment risks, and improve investment efficiency. In the business due diligence consulting service, Shangpu Consulting not only pays attention to the investigation and evaluation of the target enterprise or project, but also pays attention to the assessment and plan formulation of possible risks, so as to deal with the uncertainty and variability of the market, finance, law, technology, management and so on, so as to ensure the smooth implementation of business decisions and the safe recovery of investment. The methods and processes for risk assessment and pre-planning of Champ Consulting are as follows:

-Step 1: Determine the objectives and scope of the risk assessment and plan development. Before conducting risk assessment and plan formulation, Shangpu Consulting needs to communicate with customers and confirm the objectives and scope of risk assessment and plan formulation, including the purpose, object, content, standard and time limit of risk assessment and plan formulation, so as to ensure that the direction and focus of risk assessment and plan formulation are consistent with the needs and expectations of customers and avoid deviation or omission.

-Step 2: Collect and organize risk-related information and data. In the process of risk assessment and plan formulation, Shangpu Consulting needs to collect and sort out all kinds of information and data related to the target enterprise or project, including market, financial, legal, technical, management and other information and data, as well as various risk factors, risk events, risk impact and other information and data related to the target enterprise or project, so as to carry out risk identification and analysis. Shangpu Consulting collects and collates information and data through a variety of channels, means and angles, including literature, network resources, expert interviews, on-site surveys, questionnaires, data mining, etc., to ensure the authenticity, completeness, accuracy and timeliness of information and data.

-Step 3: Identify and analyze various risks. In the process of risk assessment and plan formulation, Shangpu Consulting needs to identify and analyze various risks that may affect the value, risk and potential of the target enterprise or project, including market risk, financial risk, legal risk, technical risk, management risk, etc., to determine the type, source, scope and degree of various risks. Champ Consulting identifies and analyzes risks through various methods, tools and logics, including risk list method, risk factor method, risk matrix method, risk identification chart method, risk sensitivity analysis, risk decision tree analysis, risk Monte Carlo simulation analysis, risk fault tree analysis, etc., to reveal the probability of occurrence, influence degree, influence scope and influence direction of various risks.

-Step 4: Assess and control various risks. In the process of risk assessment and plan formulation, Shangpu Consulting needs to assess and control various risks that have been identified and analyzed, including market risk, financial risk, legal risk, technical risk, management risk, etc., to determine the importance, priority, acceptability, controllability, etc. of various risks, and adopt corresponding risk control strategies according to different risk situations, including risk aversion, risk transfer, risk mitigation, risk taking, etc., to reduce or eliminate the probability and impact of various risks, and to improve or maintain the balance and stability of the value, risk and potential of the target enterprise or project. Champ Consulting conducts risk assessment and control through a variety of methods, forms and languages, including risk hotspot map method, risk scoring method, risk index method, risk level analysis method, risk control matrix method, risk control plan, etc., to convey the meaning, value, risk, potential of various risks.

-Step 5: Develop and implement various plans. In the process of risk assessment and plan formulation, Shangpu Consulting needs to formulate corresponding countermeasures and plans according to different risk situations and risk control strategies to deal with various risks and changes that may arise. to ensure the smooth implementation of business decisions and the safe recovery of investments. Shangpu Consulting formulates and implements the plan through a variety of methods, forms and languages, including the plan type method, the plan level method, the plan preparation method, the plan implementation method, the plan test method, the plan evaluation method, etc., to ensure the rationality, effectiveness, feasibility and flexibility of the plan.

4. how to use the results of risk assessment and planning to optimize and adjust business decisions.

In the process of risk assessment and plan formulation, Shangpu Consulting not only provides customers with comprehensive, in-depth and objective investigation and evaluation of target enterprises or projects, but also provides customers with effective, timely and flexible risk assessment and plan formulation to deal with various risks and changes that may occur, so as to ensure the smooth implementation of business decisions and the safe recovery of investment. The results of the risk assessment and pre-planning of Champ Consulting can help clients optimize and adjust their business decisions in the following ways and steps:

-Step 1: Determine the objectives and options for business decisions based on the results of the risk assessment and plan development. In the process of risk assessment and plan formulation, Shangpu Consulting will provide customers with detailed risk assessment reports and plan formulation reports, including the type, source, scope, degree, occurrence probability, influence degree, influence scope, influence direction, importance, priority, acceptability, controllability, etc. of various risks, as well as various risk control strategies, response measures, plan types, plan levels, plan content, plan implementation, etc. Based on these reports, customers can determine the objectives and programs of business decisions, including the purpose, object, content, standard, term, etc. of investment, merger and acquisition, cooperation, etc., as well as the mode, form, condition and price of investment, merger and acquisition, cooperation, etc.

-The second step: according to the results of risk assessment and planning, optimize and adjust the objectives and plans of business decisions. In the process of risk assessment and plan formulation, Shangpu Consulting will provide customers with professional risk assessment and plan formulation suggestions and opinions, including how to make use of the advantages and potential of various risks, how to avoid or reduce the threats and losses of various risks, how to deal with the changes and uncertainties of various risks, and how to improve or maintain the balance and stability of the value, risk and potential of the target enterprise or project. According to these suggestions and opinions, customers can optimize and adjust the objectives and plans of business decision-making, including increasing or decreasing the scale, scope and frequency of investment, merger and acquisition, cooperation, etc., as well as modifying or improving the mode, form, condition and price of investment, merger and acquisition, cooperation, etc.

-Step 3: Implement and monitor the objectives and scenarios of business decisions based on the results of risk assessment and contingency planning. In the process of risk assessment and plan formulation, Shangpu Consulting will provide customers with sound risk assessment and plan formulation implementation and supervision plans, including various risk control plans, response measures, plan implementation, plan testing, plan evaluation, etc., as well as various risk monitoring, reporting, feedback, improvement, etc. According to these programs, customers can implement and supervise the objectives and programs of business decisions, including the implementation and completion of all aspects, steps and tasks of investment, merger and acquisition, cooperation, etc., as well as the inspection and evaluation of the effects, results and benefits of investment, merger and acquisition, cooperation, etc.