Reported earnings aren’t always real earnings.
Our quality of earnings (QoE) engagements examine the sustainability and accuracy of a company’s reported earnings.
We help provide buyers, sellers, and lenders with a clearer picture of a company’s true economic performance, beyond what the financial statements alone can offer. Our QoE engagements focus on identifying non-recurring items, normalizing adjustments to EBITDA, evaluating revenue recognition policies and practices, and assessing working capital trends.
Unlike an audit, QoE engagements are not designed to express an opinion on the financial statements as a whole. Instead, it provides a targeted analysis of the earnings stream that a purchase price is built upon. AsuraTrust is a Tampa-based CPA Firm, and we support buyers, sellers, and lenders on transactions involving companies in the Tampa area and beyond.
Whether you’re preparing to buy, getting ready to go to market, or weighing a financing decision, our Firm is here to help. Schedule a consultation today.
What to expect from the engagement.
Scope
Specifically targets a company’s earnings stream and working capital trends.
Common uses
QoE engagements are commonly utilized as part of mergers and acquisitions and are usually performed from one of two vantage points, buy-side or sell-side.
Value
Provides specified parties with a high degree of confidence in the reliability of the information being analyzed.
Deliverable
Unlike an audit, no opinion is expressed. The typical output for a QoE engagement is an analytical report intended for a specific user.
Three vantage points on the same earnings.
Private equity & strategic buyers
An independent view of sustainable EBITDA before the deal closes — the earnings a purchase multiple is actually applied to. QoE findings support financing packages and strengthen positions in purchase price negotiations.
Business owners & sellers
Find the issues before a buyer’s diligence team does. A sell-side QoE surfaces adjustments early, builds a defensible adjusted EBITDA, and reduces the risk of price re-trading late in the process.
Lenders & credit funds
Debt decisions rest on normalized cash flow, not reported results. A QoE analysis helps lenders assess whether earnings can realistically support the proposed debt service before capital is committed.
Designed for both sides of the transaction.
Buy-sideThe acquirer or investor, typically after a letter of intent is signed.
Sell-sideThe company or its owners, before going to market.
Buy-sideDuring due diligence, before closing.
Sell-sideAhead of the sale process — often months before buyers are contacted.
Buy-sideValidating reported EBITDA, quality of revenue, customer concentration, and the working capital peg.
Sell-sideSurfacing normalizing adjustments early and preparing a defensible adjusted EBITDA.
Buy-sideInforms the purchase price, the financing, and the terms of the purchase agreement.
Sell-sideShortens buyer diligence and reduces the risk of late-stage price re-trading.
Need assurance on the financial statements themselves? Learn more about our financial statement audits.
Considering a transaction?
Connect with us to discuss how our services can provide the support you need.
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