GENERAL OVERVIEW
With our Quality of Earnings (QoE) Report, you'll have peace of mind knowing a team of highly experienced and qualified CPAs have exhaustively and diligently combed through your prospective business' financials to ensure everything checks out.
Our QoE Report service may include, but is not limited to, advice and recommendations with respect to the review of financial information, contract and financial reporting matters, and financial due diligence analyses and inquiries. We will review background financial and structural information, analyze historical, as well as review and assess detailed transactions including revenue, expenses, earnings, balance sheet, normalized net working capital, and more.
We will deliver a due diligence report which will present (i) an assessment of normalized EBITDA for the past two fiscal years + YTD and (ii) financial review and key trends analysis. The report will cover the Quality of Earnings and may include, as mutually agreed between the parties, other ad hoc analyses which may be useful to you as a prospective buyer and owner.
WHAT YOU'LL RECEIVE
3-4 Week Turnaround
Our turnaround time should be within three to four weeks of engagement and is dependent on timely receiving all the pertinent documentation. A data request will be released upon completion of engagement acceptance.
Comprehensive PDF Report
Professional report you can use to make an effective and informed buying decision, as well as share with any lending partners, including SBA lenders, and investors.
Direct CPA Access
You'll be in constant communication with your dedicated M&A CPA throughout the due diligence process and will work with them directly to address any questions or concerns.
Unlimited Support
Our Quality of Earnings (QoE) Report offers unlimited client support so we'll be there to help and offer advice long after we've delivered our finalized report to you.
EVERYTHING INCLUDED
- Read available background information (Target's history, structure, and operations) and internal financial data and management reporting/analysis packages
- Analyze the methodology for which the financial information for the Target is prepared, including any assumptions, adjustments, and allocations
- Quality of revenue, expenses, key trends, earnings, management adjustments (add-backs)
- Review bank statements and perform Proof of Cash analysis
- High-level analysis and commentary on trends in direct operating and SG&A costs incurred within the business
- Inquire about out of period, nonrecurring, unusual and non-cash items
- Identify Customer and vendor concentration
- Review management proposed adjustments to normalize EBITDA (if any)
- Identify and assess off-balance sheet liabilities, accrued liability, and other environmental or litigation related liabilities
- Light tax review with the aim to identify any potential red flags only and not a full tax diligence
- Review of balance sheet
- Analyze historical working capital trends, with a focus on seasonality, high/low points, potential normalizing items, and average run rate
- Analyze a summary of accounts receivable, including aging and bad debt statistics
- Analyze the composition of inventory and inquire about: Target's inventory costing methodology, reserve policies, and write-down history, broken down by inventory-type
- Analyze a summary of account payables, including aging statistics. Inquire about normal and special credit terms (including rebates), significant past due payables and disputes with suppliers
- CAPEX Analysis: Analyzing capital expenditure trends and requirements
- Analyze a summary of prepaid expenses, deferred cost of sales and other current assets to obtain an understanding of related impact on future earnings
- Prepare and submit additional data requirements and questions relevant to our scope