Quality of earnings for the sale ahead.
We connect sell-side quality of earnings analysis with tax structuring and proceeds planning. For owners of established businesses, preparation begins with a clearer view of the earnings a buyer will examine and the decisions that shape what you retain post-transaction.
Advisory at a glance
Understand the earnings behind the numbers.
Reported profit is a starting point. A quality of earnings review examines the underlying performance, including recurring revenue, unusual costs and the support for proposed earnings adjustments.
Preparing that analysis before buyer diligence gives you time to examine questions, assemble supporting records and consider their implications alongside transaction structure and after-tax proceeds.
What we consider
Recurring performance
A quality of earnings analysis examines which revenue and expenses reflect ongoing operations. Trends, customer concentration and changes in the business help explain the performance behind reported results.
Earnings adjustments
One-time costs, unusual income and owner-related expenses may require closer examination. Proposed adjustments need context and supporting records; an expense does not become an acceptable add-back simply because the seller identifies it.
Working capital and cash needs
Earnings are considered alongside the cash required to operate the business. Seasonality and working capital patterns can inform the financial questions raised during transaction preparation.
Structure and owner proceeds
We connect sell-side QoE with pre-LOI structuring and proceeds modeling within your broader advisory relationship. Earnings analysis and tax planning inform different parts of the same sale decision.
Preparation led by senior judgment
The engagement is shaped around your financial records, transaction stage and the questions that need attention.
Assess
Review the business, available financial information and anticipated sale process to establish priorities and scope.
Examine
Analyze earnings patterns and potential adjustments, with supporting records and management context.
Coordinate
Bring the findings into discussions about transaction preparation, structure and owner proceeds.
Prepare
Identify the explanations and supporting information needed as the business moves toward buyer diligence.
Sale decisions in context
These illustrative situations show the questions sell-side preparation can address. They are hypothetical examples, not client results.
A technology founder preparing for a sale
Subscription revenue is growing, but customer concentration and a one-time implementation project complicate the earnings picture. The question is how recurring performance and proposed adjustments can be explained before buyer diligence.
A manufacturing owner considering an offer
Seasonal inventory needs and an unusual equipment-related expense affect recent results. The owner needs to examine the earnings adjustment and working capital implications alongside the proposed deal structure.
An owner reviewing proposed add-backs
Recent results include owner-related expenses and a one-time professional fee. The question is which adjustments have a sound basis and what records are needed to explain them during buyer diligence.
Explore our integrated business advisory approach.A business preparing for future diligence
Leadership anticipates a sale and wants to prepare before a buyer begins its review. The questions include how financial records explain recurring performance and where gaps in supporting information need attention.
Questions about quality of earnings
Common questions about sell-side quality of earnings engagements — what to expect, when to prepare, how a review differs from an audit, and how it connects with transaction planning.
Bring the sale into clearer view.
Bring your anticipated transaction, financial records and ownership priorities into a confidential strategy conversation. We can consider how sell-side quality of earnings fits within your tax and transaction planning.