Financial statements as an informational basis for financial due diligence

Financial reporting is a fundamental element of corporate governance and a key foundation for making informed economic decisions. Historically, financial information was not given adequate importance, even though it forms the basis for assessing financial health and business sustainability. Financial due diligence, as a comprehensive analytical process, combines financial, legal, and market analysis with the aim of identifying risks, opportunities, and the actual state of a company. It goes beyond standard auditing by considering both internal and external data sources. The primary financial statements - the balance sheet, income statement, cash flow statement, and statement of changes in equity - serve as a starting point for this process and provide a comprehensive "financial diagnosis" of the company. A systematic analysis of these reports enables insight into profitability, liquidity, efficiency, and risks, which are crucial for investors, creditors, and other stakeholders. Special attention must be paid to uncovering potential manipulations in financial reports, and therefore a high level of professional skepticism and analytical precision is required.