Quality of Earnings Report
Assess the sustainability of reported earnings and explain adjustments relevant to a transaction.
Discuss your requirement ↗When this report is used
- An acquisition valuation depends on adjusted earnings.
- A seller wants to explain exceptional or non-recurring items before marketing a business.
- Revenue recognition or unusual transactions may distort reported profitability.
- Transaction or financing discussions need an earnings-to-cash explanation.
Scope & report contents
- Scope of analysis
- Revenue recognition tests; EBITDA normalization; recurring earnings; EBITDA-to-cash bridge.
- Report contents
- An analysis of underlying earnings, an explanation of proposed earnings adjustments and a summary of concerns relevant to transaction value.
The final scope and deliverables are agreed around your purpose, reporting period and available information.
Describe your situation ↗Information & engagement requirements
Information we may request
3 years accounts; monthly sales/payroll; one-offs; customer churn; working capital.
Specific requirements
Quality of earnings analysis is tailored to the transaction and agreed evidence. It does not provide a statutory audit opinion.
Intended use
If the report will be submitted to a bank, investor, auditor, procurement team or authority, share its requirements before commissioning. We agree the entities, period, methods, reliance and deadline. Specialist qualifications and independent-review requirements are confirmed for the assignment.
A report supports the agreed assessment or submission; it does not guarantee financing or approval. Certification, legal opinions and independent assurance require a separately agreed qualified engagement.