due diligence

Due diligence is an investigation of a potential investment (such as stock) or product to confirm all facts and to ensure the purchase will meet the investor’s needs. Before investing in an asset, an investor would intend to verify if the asset is worth his investment. In the case of a stock, the investor would carefully examine every aspect of that company including its revenue and expenses, its debts, any potential future liabilities, quality of management, etc. Doing a thorough examination before moving forward with the investment is doing due diligence