Services
Know what the business really earns.
A Quality of Earnings report rebuilds a company's numbers to their true earning power, so you can buy, sell, or lend with the real figure in front of you and no surprises after the deal closes.
Who this is for.
Buyers running diligence on an acquisition, sellers preparing for a sale, and lenders underwriting an SBA 7(a) or conventional loan, who need an independent read on what the business actually earns.
Best fit when the seller's numbers rest on addbacks, related-party arrangements, or a departing owner, and the deal turns on getting Adjusted EBITDA right.
How we work.
Every engagement begins with a written scope, a fixed fee, and a short intake to settle the deal frame: what's being acquired, who replaces the owner, and which years we analyze.
A licensed CPA does the analysis end to end, the same person you talk to about it. You get a secure portal for the data room and a report built to hold up under a lender's review.
The Approach
From raw financials to a number you can stand on.
Every report follows the same disciplined path, so nothing goes from a client document straight into a conclusion.
Reconcile & Recast
We tie the seller's financials to the tax returns, mine the data room for what the P&L doesn't show, and recast the income statement onto a clean, consistent basis across the analysis period.
Test the Addbacks
Each seller addback is evaluated on the evidence and rated for confidence. Only what truly belongs is credited to Adjusted EBITDA. Weak or non-operating items are called out plainly rather than quietly inflating the number.
Report & Tie Out
You receive a clear report on one Adjusted EBITDA basis, with the key insights, red flags, and risks laid out. Every figure is tied back to the workpaper before it reaches you or your lender.
What's In The Report
The whole picture, not just the P&L.
Scope is tailored to the deal. A typical report covers earnings quality, the balance sheet and cash, and the risks that don't show up on an income statement.
Earnings Quality
- check Recast profit & loss statement
- check Adjusted EBITDA with rated addbacks
- check Seasonality & profit-margin analysis
- check Weighted-average earning power
Balance Sheet & Cash
- check Balance sheet & liquidity review
- check Adjusted net working capital
- check AR & AP aging analysis
- check Proof of cash
Risk & Reconciliation
- check Customer & vendor concentration
- check Book-to-tax reconciliation
- check Payroll reconciliation
- check Key insights & red flags
Why this matters
The price follows the earnings. Get the earnings right.
Most small-business deals are priced off a multiple of Adjusted EBITDA. When the earnings figure is built on optimistic addbacks or a below-market owner salary, the price built on top of it is wrong, and the financing stacked behind it is too.
An independent Quality of Earnings report replaces the seller's version of the number with one that holds up: reconciled to the tax returns, tested against the data room, and presented on a single, conservative basis a lender will accept.
Whether you're buying, selling, or underwriting, the cost of the analysis is small next to the cost of paying, accepting, or lending on the wrong number.