Do your due diligence by investing in a Quality of Earnings review.
As part of a pre-transaction due diligence process, the Quality of Earnings review was once mainly utilized by large companies and sophisticated buyers. Today, mid-size and smaller companies, and even first-time buyers are including Quality of Earnings reviews in their due diligence process to ensure their investment is protected.
Our due diligence and Quality of Earnings review services will provide you with actionable insights so that you can make informed decisions and prepare to run your new acquisition.
At KRD, we know what it takes to get a deal done.
Every business is different and the specific elements evaluated in a Quality of Earnings review should be tailored to answer the most important questions for that company. Typical elements of a Quality of Earnings review for mid-sized and smaller companies include:
• EBITDA analysis – earnings before interest, taxes, depreciation, and amortization, which is a key indicator for all buyers to consider. It’s important to evaluate normal EBIDTA and adjusted EBIDTA
• Tax positions taken by the company
• Analysis of annual and monthly financial information
• Analysis of KPIs (Key Performance Indicators)
• Revenue and gross margin by product
• Customer analysis
• Market segments
• Operating expenses and employee analysis
• Key balance sheet highlights
• Normalized levels of working capital needed to operate the business
In addition to due diligence and quality of earning review, our advisors can assist with Mergers & Acquisition consulting and deal structure, business valuations, and succession planning.
Buying or Selling a Business? Let’s Talk. Contact KRD Today.
Our advisors conduct the reporting process with speed and expertise. Contact KRD today to learn more about how you can get the most out of your financial due diligence process as a buyer, seller, or business advisor.
