Quality of Earnings Analysis

We help you mitigate risk so you can confidently close on your business acquisition.

Experience Matters


When you need quality of earnings analysis, experience is crucial. As a specialized transaction advisory CPA firm, Midwest CPA excels in delivering thorough and insightful QoE reports. We go beyond standard evaluations to offer an independent perspective that uncovers critical financial details, potential risks, and opportunities for value enhancement in your transaction.

Over 50
Transactions

In the last 12-months alone

How We Help

The primary reason for conducting a QoE is its direct impact on the purchase price. A QoE evaluates three critical factors, helping buyers assess if the business price is reasonable.

Enterprise Value

Enterprise value is determined by taking a multiple of EBITDA or similar financial measure. We will analyze the financials to determine if that financial measure is accurately reported as well as any key factors that impact the multiple.

Net Debt

An assessment of debt-like items is done to highlight any potential reductions to enterprise value and future cash flows.

Net Working Capital

If less than a normal level of working capital is delivered at the closing of a transaction the buyer may be required to contribute additional capital in order to fund operations.

A comprehensive analysis of the business is needed to ensure adequate working capital is delivered at closing.

Our Clients Have Bought in a Variety of Industries

Midwest CPA advises self funded searchers, traditional searchers, private equity groups, family offices, and strategic acquirers in evaluating acquisitions with transaction values up to $50 million. 

Frequently Asked Questions

We recommend that our clients budget 4 weeks for the quality of earnings analysis in due diligence. 

The project is often completed in 2-3 weeks as long as the seller provides data and answers questions within a reasonable timeframe. 

A quality of earnings report can be a substantial investment.

That being said unless you can afford to easily lose the entire purchase price of the business you are buying it makes sense to protect yourself by having an expert analyze the financials. 

Were happy to speak with you at any point in your search. 

The best time to reach out is when you are getting close to submitting an LOI on a deal you are serious about. 

An audit is different from a QoE in a variety of ways. For one an audit is a regulated procedure that has specific guidelines for how it needs to be completed. A QoE is a consulting engagement that can technically be done by anyone although they are typically done by CPAs.

An audit is much more balance sheet focused while a QoE is more focused on the income statement. The audit is looking to confirm that the financials comply with GAAP while a QoE helps a buyer understand the financial performance of the company that can be projected into the future as well as the key operating metrics.

On deals where audited financials are available the audit is complimentary to the QoE.

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