Quality of Earnings Buyside/Sellside
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What is in included in our QoE analysis
Key Findings
Adjusted EBITDA
Adjusted EBITDA
This section summarizes the primary insights derived from a thorough review of the company’s financials, highlighting any significant trends, discrepancies, or anomalies that could affect the valuation or transaction. These findings provide a clear snapshot of the company’s financial health and operational performance.
Adjusted EBITDA
Adjusted EBITDA
Adjusted EBITDA
Adjusted EBITDA is calculated by excluding non-recurring, non-operating, or unusual items to provide a clearer picture of the company’s core operating performance. This adjustment helps assess the true profitability and cash-generating ability of the business. choose the right investment options for your portfolio. We provide support for each adjustment.
Recast PL
Adjusted EBITDA
Seasonality and Profit Margin
A recast P&L reflects all adjustments made to the original profit and loss statement, including addbacks to EBITDA. This provides a more accurate representation of the company’s operational performance.
Seasonality and Profit Margin
Customer and Vendor Concentration
Seasonality and Profit Margin
This analysis identifies any seasonal fluctuations in revenue or profit, helping to adjust for periods of peak or low performance. By understanding seasonality, we can provide a clearer estimate of long-term profitability and stability.
PL Analysis
Customer and Vendor Concentration
Customer and Vendor Concentration
A detailed P&L analysis reviews the company’s income statement for trends, anomalies, and insights into operational efficiency. This allows for a deeper understanding of the business’s cost structure and revenue streams. This analysis is done a monthly, quarterly and annual level.
Customer and Vendor Concentration
Customer and Vendor Concentration
Customer and Vendor Concentration
This analysis evaluates the risk posed by reliance on a small number of customers or vendors. High concentration could indicate vulnerability in revenue streams or supply chains that may need to be addressed in the transaction.
BS Analysis
AR and AP Aging Analysis
Adjusted NWC
The balance sheet analysis focuses on the company's assets, liabilities, and equity to assess its financial stability and liquidity. Key items are reviewed to identify any financial risks or opportunities for improvement.
Adjusted NWC
AR and AP Aging Analysis
Adjusted NWC
This adjustment accounts for changes in working capital that reflect the company’s true operational needs. By analyzing the net working capital, we gain insights into the company’s short-term financial health and ability to cover its obligations.
AR and AP Aging Analysis
AR and AP Aging Analysis
AR and AP Aging Analysis
This analysis reviews the aging of accounts receivable (AR) and accounts payable (AP) to assess liquidity and cash flow efficiency. It helps identify any potential collection issues or payment delays that could affect the business’s financial performance.
Proof of Cash
Payroll Reconciliation
AR and AP Aging Analysis
Proof of cash verifies the accuracy of cash flow by reconciling the bank statement with the reported cash movements in the company’s books. This ensures that the financial statements reflect actual cash deposits and disbursements and not just accounting entries.
Book to Tax
Payroll Reconciliation
Payroll Reconciliation
The book-to-tax reconciliation compares the company's financial accounting records with tax filings to identify discrepancies between reported earnings and taxable income. This ensures consistency and compliance with tax regulations while adjusting for tax-related impacts.
Payroll Reconciliation
Payroll Reconciliation
Payroll Reconciliation
Payroll reconciliation ensures that employee compensation records from a payroll provider match the PL. It helps identify any discrepancies or inconsistencies that may impact labor cost calculations or compliance with tax laws.
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Our Story
QOE Prep
Founded in 2022, QoE Prep is a boutique firm specializing in Quality of Earnings preparation. Our mission is to deliver innovative, high-quality solutions tailored to each client's unique needs. Backed by a team of seasoned professionals with extensive expertise in QoE, we are committed to excellence and timeliness in every engagement. By leveraging advanced excel formulas we enhance our services and maximize value for our clients. Understanding that every deal is distinct, we go the extra mile to ensure a superior QoE experience for our clients.
Frequently Asked Questions
Founded in 2022, QOE Prep has rapidly become a trusted partner in delivering high-quality Quality of Earnings (QoE) preparation services. We specialize in serving investment bankers, M&A brokers, and private equity groups, providing exceptional financial insights that drive successful transactions for both buyers and sellers.
Our dedicated team delivers unmatched efficiency, completing a comprehensive Quality of Earnings analysis in under four weeks, faster than any other firm.
In 2024, we have successfully completed 57 Quality of Earnings reports, demonstrating our extensive experience across a wide range of industries. These include, but are not limited to, manufacturing, SaaS, restaurants, professional services, healthcare, and technology. Our transactions span from $1 million to $50 million, reflecting the breadth and depth of our expertise in handling deals of various sizes.
QOE Prep distinguishes itself from other firms by specializing exclusively in Quality of Earnings (QoE) preparation. Unlike general accounting or tax firms, we focus our expertise on the intricacies of transactions, allowing us to deliver unmatched quality and insight. While our standards of excellence rival those of the Big Four, we offer our services at more competitive and reasonable rates. Furthermore, our team's speed and deep transaction knowledge set us apart from local firms that may not have the same level of experience or specialization in this critical area. they have all the tools to create a great quality of earnings databook.