- Financial Statements (balance sheet, income statement, statement of changes in equity, statement of cash flows and any notes to the financial statements) for the most recent year-end available and for each of the prior three years. Include year-to-date financial statements, by month for the most recent year ended with comparative information for the same period in the prior year. Also include descriptions (and estimated amounts) of any adjustments typically made at year-end but not at interim dates which impact the comparability of the statements.
- Monthly and quarterly income statements for the most current year and the two prior years.
- Budget/projected income statements for the current year.
- General Ledger trial balances (in summary form, not inclusive of individual transactions) for the most recent year-end and the prior year.
- If consulting services are provided, provide a summary of billed hours by quarter for the current year (up to and including the last month end) and the prior year.
- Provide the names and contact information for key accountants and principal bankers.
- Describe the planning cycle.
- Outline company’s computerized information systems.
- If the company is audited, did the auditors raise any matters in their audit management letter pertaining to the company’s internal controls or accounting, if so what were these matters?
- Provide audit management letters for the past three years.
- Listing of all accounts with the last 3 years bank statements.
- Descriptions and summaries of types of receivables included on the balance sheet (i.e. trade receivables, receivables from employees, etc.)
- Reconciliation of the subsidiary accounts receivable ledger to the general ledger.
- Description of the Company’s credit policy, terms of sale (both normal and any special terms), policy related to returns and method of calculation for any reserves for bad debts or return of product.
- Copies of any significant customer contracts.
- Aging of accounts receivable by quarter for the prior three years with explanations of any significant changes.
- Summaries of bad debt expense, accounts written off and customer returns and allowances for the most recent year-end and the prior three years.
- Summary of inventory by major product line.
- Description of policies for physical inventory counts, costing of inventories and excess or obsolete inventories.
- Most recent reconciliation of physical inventory count to general ledger balances.
- Listing of consigned or off-site inventory.
- Listing of any obsolete or slow moving inventory.
Property, Plant and Equipment
- Listing of fixed assets at the most recent year-end showing location, year of purchase, cost and accumulated depreciation.
- Listing of leased fixed assets showing location, annual rentals, expiration dates, renewal options and age. Also provide copies of the significant lease agreements.
- Listing of idle or obsolete fixed assets.
- Description of capitalization policy and listing of capital expenditure requirements through the end of the current fiscal year.
- Reconciliation of the subsidiary accounts payable ledger to the general ledger.
- Explanation of procedures and cut off for month end accounting.
Provide a comparative summary of accrued expenses at the most recent year-end and the prior year with explanations of significant differences. Also provide explanations of the methods used to accrue significant costs and copies of the calculations at both periods. The accruals should include the following:
- Salaries and wages;
- Employee benefits (including 401K or pension plans);
- Commissions (internal and external);
- Customer advances, credit balances or deposits;
- Customer returns;
- Any insurance which is self-insured or includes retroactive premium adjustments;
- Dividends declared;
- Environmental or legal liabilities.
- Roll forward of all equity accounts from the year ended three years ago to the most recent year-end with copies of supporting documentation for any changes not related to earnings or dividends.
- Description of any stock options or warrants outstanding with copies of any relevant agreements.
- Listing of shareholders at the most recent year-end.
Income Statement Detail
- Comparative income statement including the most recent year-end and the prior year with explanations for significant variations.
- Comparison of budget to actual results for the most recent year-end.
- Copies of any budget or forecast information available for future periods with brief explanations of the significant assumptions used.
- Customer history reports showing sales by customer for the most recent year-end and the prior year with explanations of any significant changes in levels of sales for large customers.
- Vendor history reports showing purchases by vendor for the most recent year-end and the prior year with explanations of any significant changes in levels of purchases for large vendors.
- Listing of non-recurring income statement items for the most recent year-end and the prior year with copies of supporting documentation.
- Copies of federal and state tax returns for the last three years, including copies of all 941 forms.
- Payroll reports.
- Listing of all taxes to which the company is subject (including sales and use taxes, franchise taxes, etc.)
- Descriptions of the Company’s procedures on the collection of sales taxes and filing of sales tax returns.
- Description of any audits performed by tax authorities and the outcome of the audits.
- Copies of any waivers of the statute of limitation, if any.
- Provide copies of articles of incorporation and by-laws.
- Provide a list of states in which the company is registered/qualified to do business.
- List officers and directors, with number of years in office.
- Details of any changes in corporate structure, including liquidations, mergers or consolidations.
- Provide copies of minutes.
- Provide details of any stock options or other securities.
- Provide names and addresses of legal advisors.
- Describe any major pending litigation or threatened litigation.
- Schedule fees paid to directors during the most recent two years.
- Were any significant transactions conducted during the most recent two years with entities in which a stockholder, director, officer or his/her immediate family held an interest? If so, describe the nature of the transaction(s) and the amounts involved. Provide copies of any contracts.
- Provide copies of:
major contracts with clients;
agreements under which company is a guarantor;
mortgages or other encumbrances over company property;
registered patents and trademarks, or pending applications; and
patent, trademark or technology license agreements.
- Provide an organization chart;
- Provide copies of any bonus or incentive programs or fringe benefits for employees;
- Provide a summary of bonuses paid to management for the last three years;
- Provide or describe the company’s policies regarding vacation and sick pay;
- Describe employee benefit plans;
- Provide current pension plan valuation report;
- Provide copies of employee policies;
- Provide copies of any employment agreements;
- Provide resumes or brief biographies for all key management.
Provide copies of all current insurance policies or if unavailable, provide broker summaries. Include, if applicable:
- Property & liability;
- Umbrella Liability;
- Workers Compensation;
- Professional liability;
- Directors & Officers Liability;
- Fiduciary Liability;
- Employment Practices Liability;
- Surety Bonds.