Quality of Earnings

  • Analyze the cash flow of the operation, prove the collections and expenses recorded in the financial statements compared to the deposits and disbursements in the bank statements, each to determine ongoing cash flow from operations.

  • Identify unusual or one-time items to “normalize” cash flow for valuation analysis by the client.

  • Thoroughly understand the revenue and expense cycles of the business and assess compliance with GAAP.

  • Prepare QOEs for both buyers and sellers.