How Can a Buyer Verify a Seller's ROI Claim During Due Diligence?

Every business-for-sale listing seems to come with an ROI number attached — 30%, 40%, sometimes higher. It looks reassuring. It's also, more often than not, unverified.

Before you rely on any ROI figure a seller gives you, here's how to actually check it.

Ask for audited or bank-verifiable financials, not a spreadsheet

• A profit figure typed into a listing means nothing on its own
• Ask for VAT returns, bank statements, or audited accounts covering at least 12 months
• If the seller can only offer a self-made P&L with no supporting documents, treat the ROI claim as unverified until proven otherwise

Separate net profit from gross profit

• Many ROI claims are calculated before rent, salaries, and owner's draw are deducted
• Ask the seller to walk you through the calculation line by line
• If they can't show you the deductions, assume the real number is lower

Check the time period behind the number

• A single strong month or a pre-slowdown year can be annualized to produce a flattering ROI
• Ask for month-by-month figures across the full trading period, not just the headline annual total
• Look for consistency, not just a peak

Confirm what the investment base actually includes

• ROI is a ratio — the return divided by what was invested
• Ask whether the "investment" figure includes stock, fit-out, and working capital, or just the asking price
• A claim that skips half the investment inflates the return artificially

Cross-check against sector norms

• Compare the claimed ROI against typical ranges for that type of business in Dubai
• A figure well above the norm is not automatically false, but it does warrant closer scrutiny before you accept it

Bring in an accountant before you commit

• A short, paid review by an independent accountant is inexpensive compared to buying into an overstated business
• This is the single most reliable way to confirm — or rule out — a seller's ROI claim

FAQ Schema

Q: How can a buyer verify a seller's ROI claim during due diligence?
A: By requesting audited or bank-verifiable financials, separating net from gross profit, checking the full trading period rather than a single strong month, confirming exactly what the investment base includes, and having an independent accountant review the figures before committing.

Q: What documents should a buyer ask for to check ROI?
A: VAT returns, bank statements, and audited accounts covering at least the past 12 months — not just a seller-prepared spreadsheet.

Q: Is a seller's stated ROI usually accurate?
A: It varies. Some claims are based on gross profit, a single strong period, or an unclear investment base, all of which can overstate the real return. Verification is the only way to know.

Q: Should a buyer hire an accountant before trusting an ROI claim?
A: Yes — an independent review is a small cost relative to the risk of buying a business based on an inflated ROI figure.

Not sure whether a listing's ROI claim stacks up? BFS can help you check it before you commit.

• Email: info@businessesforsale.ae
• Website: businessesforsale.ae
• Instagram: @bfs.dubai