This suits independent sponsors and lower-middle-market funds that need institutional-quality diligence on every acquisition but do not keep a full diligence team in-house.
What a Quality of Earnings analysis tells you
A QoE restates a company's reported earnings to separate sustainable, recurring income from one-time or owner-driven items. The result is a defensible adjusted EBITDA. Buyers and lenders apply valuation multiples to that number, so it directly drives deal pricing.
Typical adjustments include revenue recognition aligned to the underlying contracts, owner compensation normalized to market, related-party arrangements such as rent reset to market terms, and one-time items removed.
What we test and what you receive
| Workstream | What you get |
|---|---|
| Adjusted EBITDA | Historical normalization and a documented adjustment bridge |
| Revenue quality | Recognition tested against contracts, plus trend analysis |
| Net working capital | Analysis and a proposed peg |
| Net debt | Debt-like items and off-balance sheet obligations |
| Concentration | Customer and vendor exposure, quantified |
| Proof of cash | Bank-to-book tie-out |
| Tax and payroll | Reconciliation to tax filings and payroll |
| AR and AP aging | Collectability and payment-pattern review |
| Risk summary | Red-flag analysis with materiality, plus a buyer diligence question list |
Every engagement ends with a QoE report and supporting workbooks, buy-side or sell-side. Scope flexes to the deal: full diligence for larger transactions, targeted mini-diligence for smaller or time-compressed ones.
How an engagement runs
Scoping call.
We agree scope, timeline and the questions that matter most.
Data and requirements.
We gather what we need through a secure platform.
Analysis.
Our senior team runs the diligence analysis.
Readout.
Key findings, risks and open points reach you early, while there is still time to act.
Delivery.
The report and workbooks come straight to you.
Case study: Buy-Side Quality of Earnings for a Frozen Dessert Manufacturer
A US buyer needed to know whether a Southeast US manufacturer's reported profitability matched what a new owner would inherit. We found below-market related-party rent that inflated EBITDA, normalized it to market and lowered the earnings base the buyer would have paid a multiple on. We also quantified that two distributors drove about 89% of revenue and stress-tested losing either one. The full report took three weeks.
Read the case studyWhy work with us
- The team that does the work. You deal with the senior professionals who run the numbers, with no layer in between.
- US CPA and Indian CA together. US GAAP fluency and investor and lender expectations in every analysis.
- Transaction specialists. FDD and QoE are our core, not a side line of an accounting or tax practice.
- Confidential by design. Company-issued, monitored laptops only, role-based access, and an NDA on every engagement.
- Clear pricing. Fixed fee agreed before work begins.
Last updated October 29, 2026