Financial Due Diligence Begins with a Quality of Earnings Review

We have crafted our Quality of Earnings offering to serve entrepreneurs, independent sponsors, search funds, and lower middle market PE funds that need Big 4-quality outputs at a price that justifies the deal size.

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The Value of a Quality of Earnings Review

Business Buyers and Sellers need a Quality of Earnings Review

A Quality of Earnings (QofE) report analyzes the historical financials to exclude any non-recurring, one-time events and personal expenses. It provides the foundation for a run-rate view of how the business will perform post-transaction.
Buyers can uncover the factors that drive earnings and determine if they are sustainable.
Sellers can uncover factors that will impact the deal and take steps to improve outcomes before launching the sales process.

benefits of an Embarc Advisors quality of earnings

High Quality and Cost-Effective Expertise for the Middle Market

Top-Tier Quality Output

All Ex-Big 4 team
10+ years of experience per team member

Quick Turnaround Time

3-4 Week turnaround time
Agile team that can launch new projects quickly

Cost-Competitive

Typical range of $25,000-$40,000 / QofE
Scope can be tailored to your unique needs

Flexible Scope and Outputs

A QofE That Goes Beyond Checking the Box

Our Core Quality of Earnings Analysis Includes several activities and reports:

Accounting / GAAP compliance
Normalization of EBITDA
Proforma adjustments
Proof of cash
Proactive Net Working Capital target setting

Outputs Can Go Beyond Standard EBITDA Normalization to Meet Your Unique Needs. Additional Reports Available:

Deeper revenue and margin analysis
Customer Churn/Retention analysis
Review of purchase agreements and deal terms
Year 1 budget forecast
Seamless integration with post-close FP&A advisory

The Embarc Advisors Advantage

Financial Due Diligence (FDD) that Addresses the Broader Needs of the Lower Middle Market

Middle market firms are often staffed lean when it comes to financial matters. Yet, different expertise is needed throughout the business lifecycle. As a full-service financial firm for the middle market, clients have access to professional expertise that falls outside the boundaries of a traditional QofE engagement.

Mike Pallera
Quality of Earnings and M&A Sell-side Services

“Other firms that I interviewed tried to lower my expectations on what to expect for a multiplier. Embarc gained a full understanding of my business, from financials to sales, to profitability to sustainability, so they can communicate the value to potential buyers.”

Quality of Earnings and Financial Due Diligence Resources

EBITDA: What Is It and Why Is It Important?

How a Preemptive Quality of Earnings Review Can Maximize Deal Value

Why Every M&A Deal Needs a Quality of Earnings (QofE) Assessment

Understanding Due Diligence Support

See How A Tailored Solution Can Benefit Your Vision

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