"Due Diligence" refers to the comprehensive and thorough analysis and assessment carried out by investors, before engaging in any investment activity. This process involves conducting research and scrutiny of relevant information to ensure that all material facts about securities, company, or investment opportunity are known and understood.
Factors to consider while doing Due Diligence
- What business is the company involved in?
- Understand business model of the company or investment scheme with respect to future growth
- Compare the company with it's competitors
- Check data related to current economic condition affecting company’s growth and stock price.
- Company’s financial health: examining cash flow statement, income statement and balance sheet for at least past two years.
- Latest price and volume, historical data, corporate announcement, etc.
- Price/Earning (P/E) ratio and intrinsic value of the share of the company.
You may contact a reliable financial advisor to guide you through the investment planning process.
Please see the following video: -
Always check fundaments before investing
Do not fall for luring scheme
Invest only after carefully analyzing risk return profile
Due Diligence before Investing