Sell-side readiness
Organize normalized earnings, recurring revenue, owner and one-time items, working-capital patterns, and an issues log before a buyer’s diligence process.
Transaction readiness · Nationwide support
Quality of Earnings Preparation for Diligence
Make the financial story review-ready before buyers, lenders, or investors start asking questions. A quality of earnings preparation engagement organizes the evidence behind reported earnings, identifies normalization items, and surfaces diligence issues early.
Who it fits
Preparation for the moments when earnings will be examined
Buy-side or lender review
Structure the financial questions and supporting schedules needed to evaluate reported performance, cash conversion, debt-like items, and forecast assumptions.
Management clarity
Turn scattered schedules into a practical readout for owners and advisors, with open items and next actions clearly separated from conclusions.
Typical deliverables
What the preparation work can include
Normalized earnings bridge
Reconcile reported results to an adjusted earnings view and document owner compensation, unusual, nonrecurring, and discretionary items considered.
Revenue and working capital
Review revenue recognition context, customer concentration, seasonality, collection trends, working-capital needs, and debt-like items that may affect a transaction.
Diligence question log
Track missing support, follow-up questions, data limitations, and management explanations so the process stays focused and auditable by the appropriate independent professionals.
Process and inputs
A clear four-step path
1. Scope
Confirm the transaction context, period, intended users, timing, and what the work is expected to answer.
2. Collect
Gather financial statements, general ledger exports, tax returns, customer and revenue detail, debt and lease schedules, and forecasts.
3. Analyze
Normalize the information, investigate variances and cash conversion, document assumptions, and separate facts from open questions.
4. Review
Discuss the bridge, limitations, diligence questions, and practical next steps with management and the appropriate transaction advisors.
Important scope note
Preparation is not an independent audit
Quality of earnings preparation and readiness support are not an audit, review, compilation, attestation, fairness opinion, legal opinion, or investment recommendation. The engagement scope and intended users are confirmed up front; an independent CPA, attorney, or other qualified professional should handle any assurance, legal, tax, or regulatory requirement.
Call (225) 396-5511 or book a consultation to discuss fit.
FAQ
Quality of earnings questions
What is a quality of earnings analysis?
It is a structured review of reported earnings and the evidence behind them, including normalization items, revenue quality, working capital, and diligence questions. Scope varies by intended use.
How is this different from an audit?
An audit or review is an assurance engagement performed under applicable professional standards. Preparation support organizes and analyzes information for diligence but does not provide an audit opinion or attestation.
Who usually benefits from preparation?
Owners preparing for a sale, buyers evaluating a target, and lenders or investors assessing financial information may benefit when the scope and intended users are clearly defined.
What should I send first?
Start with the last three years of financial statements and tax returns, current-year results, general-ledger detail, revenue and customer schedules, debt and lease information, and a short operating overview.
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